Hyderabad: The Voluntary Retirement Scheme (VRS) announced by the state-owned Bharat Sanchar Nigam Limited (BSNL) got a tremendous response. Responding to the call given after the government’s decision to revive the national telecom, about 70,000 of the 1,65,000 BSNL’s total workforce have already opted for the early retirement scheme.
Let’s find out what is the VRS all about –
What is VRS?
Also known as ‘Golden Handshake’, typically a VRS scheme announced by a company management to its employees to reduce costs. As the name suggests it is purely voluntary in nature and employees opting for it will be offered monetary compensation in lieu of pending service years.
Why the BSNL announced VRS?
BSNL is looking at savings of about Rs 7,000 crore in wage bill, if 70,000-80,000 personnel opt for the scheme. The success of the VRS is critical to the survival of BSNL, whose 1.75 lakh strong workforce consumes 75 per cent of the company's revenues in wages. The telco has been making losses for the last 10 years and posted an estimated loss of Rs 14,300 crore in 2018-19.
Who are eligible?
All regular and permanent employees of BSNL including those on deputation to other organisation or posted outside BSNL on deputation basis are eligible for VRS. The minimum age limit to opt for the scheme is 50 years.
In all, nearly one lakh BSNL employees are eligible for the VRS out of its total staff strength of 1.50 lakh.
When is the last date?
BSNL Chairman and Managing Director P K Purwar said that the scheme will be open between November 4 and December 3. The effective date of voluntary retirement under the present scheme is January 31, 2020.
What are the benefits?
The amount of ex-gratia under VRS for any eligible employee will be equal to 35 days salary for each completed year of service and 25 days salary for every year of service left until superannuation.
Under the VRS, employees above the age of 53.5 years will get 125 per cent of their salary, which they could have earned in the balance period of their service. Employees between 50 and 53.5 years opting for the VRS will get benefit in the range of 80 to 100 per cent of the remuneration to be paid in the balance period of their service.
For employees currently above 55 years of age, on opting for VRS, the pension will be commuted only when they attain 60 years of age (the current retirement age). For the employees, currently of age 55 years and less, on opting for VRS, the pension will be commuted in the sixth year 2024-25.
Financial implications
Given the circumstances and the situation where BSNL was finding it difficult to pay the monthly salaries to its employees, government funded Rs 17,160 crore for VRS and another Rs 12,768 crore towards retirement liability.
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