The VRS scheme is targeted at the less-skilled employees who are unable to cope with the demands of digital initiatives.
Tata Group, one of the oldest business conglomerates of the country, has always been known to be an employee-friendly Group. Tata Steel (earlier Tata Iron and Steel Company), one of the first few ventures of the Group, which started in 1907, is offering voluntary retirement to its employees.
This is the second time that the Company has initiated a voluntary retirement scheme (VRS). The first one was initiated in 1995, and around 29000 employees availed the offer. Called Sunehre Bhavishya Ki Yojana 2.0, the VRS will be launched today and will be available till February 28, 2018. The first edition of this scheme — Sunehre Bhavishya Ki Yojana – was launched in 2015 and was availed by 1,526 employees.
As per the scheme, the Company will make three offers to its employees. Under the first option, employees will keep receiving a monthly amount till 75 years of age. The second option offers a lump sum amount immediately and a monthly amount till 60 years of age. As per the third option, all retirement benefits will be invested in systematic investment plans (SIPs) and mutual funds based on employees’ choice.
The Company also offers accommodation and medical benefits, which are broadly the same for all three options. Employees opting for VRS can stay at the company quarters till they turns 58 or have four years left in service, whichever is earlier. Medical benefits for self and spouse will be lifelong at Tata Main Hospital, Jamshedpur. For the employees who choose to settle outside Jamshedpur, a medical insurance scheme worth Rs 2 lakh is offered.
As per the scheme, the Company will make three offers to its employees. Under the first option, employees will keep receiving a monthly amount till 75 years of age. The second option offers a lump sum amount immediately and a monthly amount till 60 years of age. As per the third option, all retirement benefits will be invested in systematic investment plans (SIPs) and mutual funds based on employees’ choice.
Tata Steel also provides scholarships to children of employees, and the same facility will be available to wards of employees who opt for VRS. In fact, the Company plans to reserve 60 out of the total 300 seats under the Millennium Scholarship for wards of VRS employees.
The VRS scheme is targeted at employees who are less skilled and and are unable to cope up with the new skills required for digital initiatives — which is now mandatory to stay competitive in the market.
This VRS initiative is based on the needs of employees at different stages of life.
“It has been developed after much thought and surveys among employees who opted for earlier schemes,” a Tata Steel official said.
Tata Steel has nearly 36,000 employees, including 6,000 officers, across India. Jamshedpur alone has 18,000 employees, including 3,500 officers.