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Mumbai, Aug. 6: The board of UTI Mutual Fund has decided to forward the voluntary retirement scheme proposal to the government for its approval. The government is expected to foot the bill for VRS expenses.

Confirming this, the spokesperson for the mutual fund said the VRS issue was discussed along with other issues in today’s board meeting.

However, the spokesperson declined to reveal details of the scheme and the number of employees eligible for the retirement scheme offer.

“The board has discussed the VRS proposal. However, our sponsors — Life Insurance Corporation, State Bank of India, Punjab National Bank and Bank of Baroda— are not going to meet the expenditure,” UTI MF sources said here today.

There is an understanding between the government and the sponsors for meeting the expenses, sources added.

Earlier, reports had suggested that at least 1,600 UTI employees would be eligible for the scheme. However, UTI officials were unwilling to give any further details on this.

M. Damodaran, chief executive officer of UTI MF, was recently quoted saying, “As and when the scheme is introduced, it will be voluntary in nature, so a specific target of how many employees will opt for VRS cannot be specified.”

Apart from the retirement scheme, today’s meeting also focussed on the mutual fund’s performance and growth strategies, the official added.

UTI MF has a staff strength of 2,400 employees and about 700 of them have moved on deputation to UTI investors services. Some of them may also take the benefit of VRS as and when it is put in place, sources added.

The voluntary retirement plan is expected to improve the competitiveness of the mutual fund. Soon after Damodaran stepped in, the mutual fund had decided to advance the retirement age from 60 years to 58 years in order to weed out a few senior UTI officials. It saw eight senior officials retiring on this account.

After the rejig, UTI has done remarkably well in the market. It has introduced new schemes to strengthen its portfolio.