The Voluntary Retirement Scheme (VRS) allows employees to opt for early retirement while receiving a lump-sum payout from their employer. Companies use this scheme to reduce workforce costs or restructure operations while offering employees a dignified exit with financial security.
For employees, this can be an ideal way to transition into early retirement, explore new interests, or start a second career. However, managing the lump-sum amount wisely is crucial. Investing a part of it in a Bajaj Finance Fixed Deposit can help preserve capital and generate regular income with high stability.
Earn up to 7.30% p.a. with Bajaj Finance Fixed Deposit — a secure way to make your VRS funds grow steadily. Open FD.
What is VRS?
A Voluntary Retirement Scheme, also known as VRS, provides companies with the ability to offer voluntary retirement to their employees before they attain retirement age. While employees usually retire at the age of 58-60, VRS allows businesses to extend ‘early retirement’, either as a cost-cutting measure or to improve productivity.
We often hear about companies downsizing or laying off employees as a cost-cutting measure. In such situations, the voluntary retirement scheme enables companies to do what is required while also providing certain benefits to the employees. Furthermore, this method was introduced in India because the labour laws in the country do not permit the removal of unionised employees due to economic reasons.
While offering a degree of financial security, the lump-sum payout from a VRS needs careful management. Fixed deposits can be a prudent option to park a portion of these funds. Fixed deposit provide safe returns, helping preserve some of your VRS compensation while you strategize your next steps or generate income for early retirement.
