Tata Motors Rolls Out VRS with Medical & Retirement Benefits: Here's What Employees Should Know

Tata Motors Limited (TML) rolled out a Voluntary Retirement Scheme (VRS 2026) for permanent salaried employees at its Jamshedpur plant. The scheme remained open from April 10 to April 30 and covered employees in the bargainable category.

Employees aged above 40 years as of April 30, 2026 could apply for the scheme. The company introduced the plan as part of its workforce restructuring exercise and offered eligible long-serving employees an option to exit voluntarily.

Reports indicated that union discussions also played a role in the rollout of the scheme. The move came months after Tata Motors split its passenger vehicle (PV) and commercial vehicle (CV) businesses into separate listed entities in late 2025.

VRS Structure Explained

The scheme gives employees two choices — a monthly payout or a one-time settlement. Employees aged 40–45 years will get 80% of their last drawn salary, while those between 45–50 years will receive 90%. Staff in the 50–55 age group will get full salary benefits, while employees above 55 years will receive 110%.

Under the second option, the company will calculate a one-time payout based on the salary employees would have earned till the age of 60 years. Tata Motors will release the amount in two instalments, with the final payment scheduled along with the June salary.

Eligibility & Coverage

Only permanent salaried employees under the bargainable category are eligible. The scheme mainly targets employees aged 40–55 years, covering an estimated group of around 750 employees.

Temporary staff, trainees, apprentices, fixed-term contractors and employees who exited under earlier VRS plans are excluded from the scheme.

The company has also introduced a group incentive linked to participation levels. Employees get ₹50,000 for 299–448 applications, ₹75,000 for 449–597, ₹1 lakh for 598–747 and ₹1.4 lakh if applications cross 748.

Key Benefits Included

Apart from payouts, employees receive statutory and company benefits such as Provident Fund (PF) under Employees’ Provident Fund Organisation (EPFO) rules, gratuity, leave encashment and pension benefits where applicable.

Medical coverage continues for up to 10 years after retirement. This includes hospitalisation support up to ₹1.5 lakh per person and limited home treatment assistance of ₹2,000.

The company said the VRS 2026 reflects employee interest in voluntary separation for personal and professional reasons. Employees opting for the scheme will not receive future wage revisions or company-linked benefits after separation.

Reports indicated that around 275–300 employees opted for VRS 2026 compared to a total workforce of 58,442 as of FY25, showing a modest response despite the incentives offered.