Contact Us Voluntary Retirement Scheme — An Overview The Government of India, with liberalization, adopted a new economic policy whereby significant changes in the industry and business sectors were brought about. One of the important aspects of the liberalized economic policy was the Exit Policy.
The strict conditions of approved schemes as set out by ICTA 88 means most employer pension schemes will seek more flexible benefits through an exempt approved scheme granted by the PSO under the occupational pension scheme practice notes IR12 An approved scheme will be granted approval if: Retirement age A scheme member who retires before the normal retirement date NRD of an occupational pension scheme is recognised as taking early retirement.
The Inland Revenue will allow early retirement and the taking of a pension income from the age of 50 for men and women with the latest date to take a pension being An employers pension scheme will have rules that determine the generosity of the pension benefits payable to members on early retirement.
An individual could retire early voluntarily and this means that the accrued members pension rights within a final salary scheme will usually be scaled down, typically between 4.
If early retirement is due to ill health many schemes will pay benefits the member would have received at normal retirement age based on the current pensionable earnings and without scale down. If early retirement is compulsory such as in the case of redundancy, the scheme may pay an early pension based on accrued retirement benefits without scale down and possible enhancements such as half the years to retirement.
In terms of an employers treatment of men and women in an occupational pension scheme and since the Barber Judgment of 17 Maythe European Court of Justice ECJ has ruled that men and women must have equal rights to join employers pensions and that occupational pensions earned from service must be equal for men and women.
The Barber Judgment established the equal-pay-for-equal-work Article now Article of the Treaty of Rome that if an occupational pension scheme does not contain an equal treatment rule shall be treated as including one.
This means that if a scheme member of opposite sex is employed in similar work, or work of equal value, then the benefits to both sexes must be the same including the retirement ages, unless the trustees can prove that the inequality is due to a factor that is not sex related.
Regulations made under the Pensions Act have required occupational pension schemes to treat the sexes equally since January Also, under section of the Pensions Act the state retirement age for the state basic pension will be equalised to 65 for both men and women.
Scheme funding requirements Under section 56 to 61 of the Pensions Act the minimum funding requirement MFR was introduced to help occupational pension schemes such as a final salary pension to offer the members more security.
MFR in general will not apply to an occupational money purchase scheme unless that scheme also provides other salary related benefits that are subject to MFR.
On the discontinuance of the scheme, MFR is designed to ensure that the scheme will have sufficient assets to secure all pensions in payment to pensioners as well as pay a cash equivalent transfer value CETV for all active members and deferred members not yet in receipt of a pension income.
The minimum funding requirement was effective from 6 April and the scheme trustees must put in place a scheme that covers the next five years from the date of the actuarial valuation showing that the contributions made are sufficient for the scheme to be There is a transitional period of 5 years that ends on 5 April Where the valuation shows the scheme to be below Where the valuation shows funding of In certain circumstances a seriously underfunded scheme can apply to the Occupational Pension Regulatory Authority OPRA to have these time limits further extended.
The latest analysis, news, case studies and opinion in relation to pensions, with a focus on defined contribution pension schemes; pensions education, compliance with legislation such as the pension freedoms; auto re-enrolment; pension scheme governance; member engagement; and investment strategy. Voluntary retirement scheme (VRS) is an early retirement option given by the employer to its eligible employee by compensating them for taking a early retirement. Most of the public sector banks, PSU and private companies opted for voluntary retirement scheme (VRS) in past to restructure there organization. Definition: Voluntary retirement scheme is a method used by companies to reduce surplus staff. This mode has come about in India as labour laws do not permit direct retrenchment of unionized employees.
Where the scheme is in surplus OPRA will require the employer not to make contributions. If the scheme is seriously in surplus the employer may establish the pension non contributory scheme for a period of time in which case the employees will not need to make a contribution.
MFR requirements increase the burden of a final salary pension on the employer as the assets of these schemes are usually equity based, reflecting the younger age of the workforce and longer term expected to retirement ages.
It also means that the schemes will experience a cash inflow as few payments would be made to pensioners.Are you an employee looking to voluntarily resign from a job? Take a look at our voluntary employee resignation letter templates and examples to make handing in your resignation simple.
This article will explains voluntary resignations and some of the important points you will need to consider. UCC Advantage Scheme A number of busineses in Cork offer discounts to UCC staff members.
See the Advantage Scheme Webpages. The essence of the voluntary retirement scheme, which is approved by the Government - involves voluntary separation of employees who are above the age of 40 years or have served the company or establishment for minimum 10 years.5/5(1).
A pension is a fund into which a sum of money is added during an employee's employment years, and from which payments are drawn to support the person's retirement from work in the form of periodic payments.
A pension may be a "defined benefit plan" where a fixed sum is paid regularly to a person, or a "defined contribution . At a Glance. The Supplementary Retirement Scheme (SRS) is a voluntary savings programme that lets you save on taxes, make investments to grow your retirement savings, and provides you with the flexibility to make withdrawals if needed.
Voluntary retirement - also known as a voluntary retirement scheme - can be complicated, though. There are tons of pros and cons that come with such a scheme, making it weird for companies to implement.