Retirement fund manager EPFO's key advisory body Finance and Investment Committee (FIC) has recommended 8.5 per cent interest on provident fund (PF) deposits for 2010-11, the same return given to subscribers for the past five years.
FIC, at its meeting on Friday took a decision on interest rate for the coming fiscal, which will now be placed before the Central Board of Trustees (CBT), Employees Provident Fund Organisation's (EPFO) apex body, for final approval.
The FIC recommendations that would have impact on 4.71 crore depositors, are usually accepted by the CBT.
"The FIC has firmed up its view to maintain 8.5 per cent interest rate on deposits for 2010-11, despite opposition from trade union representatives. The decision would leave a surplus of Rs 15.26 crore," an EPFO source said.
"Since increasing rate to 8.75 per cent for next fiscal would result in a huge deficit of Rs 426.53 crore, the FIC decided to pay 8.5 per cent for the sixth year in a row," the source said.
The employees' representatives, including Hind Mazdoor Sabha (HMS) secretary AD Nagpal and Bharatiya Mazdoor Sabha (BMS) secretary BN Rai objected to the 8.5 per cent rate arguing that rate of return is decided after taking into account conservative income estimates.