Mumbai, Dec 2: The Associated Cement Companies Ltd (ACC) has launched a voluntary retirement scheme (VRS) open to employees in all the locations of the company. The manpower rationalisation exercise is expected to cost the company over Rs 60 crore.The company plans to reduce its workforce by about 1000 bringing down the total strength to 12,000 employees from the present strength of 13,000. The ACC department heads have been asked to convince the employees about the need to accept the VRS.
The employees retiring under the scheme would get an average payout of Rs 6 lakh. Apart from this, they would be eligible for pension, medical benefits and provident fund benefits.
ACC is following the trend of gift packing the VRS as companies are no longer offering vanila schemes with just a lumpsum retirement scheme.The scheme which opened on November 15 is slated to close on January 15. The ACC top brass is believed to have made presentations to the employees instead of circulating the scheme in all units.
The company is offering an attractive pension scheme, mediclaim facilities and even planning to make bonus payments to the employees.
The pension scheme roughly works out to a maximum payout of about 150 per cent of the basic and dearness allowance (DA) to a minimum payout of 50 per cent of basic and DA. For example, for those employees who have completed 55 years of age the pension would be 150 per cent of basic and DA while employees belonging to the age group of 52 to 55 years the pension would be 125 per cent of basic and DA. Employees in the 50 to 52 year age group would be given 100 per cent of basic and DA as pension.
The retiring employees would also have benefit of a mediclaim of Rs 50,000 while employees aged over 60 years would be given an additional benefit of Rs 75,000 in the event of hospitalisation.
INSIGHT :
Marginal benefit
If the VRS is successful, it would mean that the profit from the sale of power units would get absorbed. Basically, it will be a case of extraordinary income setting off extraordinary outgo. With the prices in east India not being attractive (in Bilaspur cluster, it is as low as Rs 75 per bag), the prices in the regions it feeds--Bihar and West Bengal-is also affected.
This will hurt the profitability of ACC even more. The retirement scheme will help the company only marginally.
-- Urmik Chhaya
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.