Retirement fund body EPFO today decided to pay 8.5 per cent interest rate to its over five crore subscribers on their PF deposits for 2012-13, higher than 8.25 per cent provided in the previous fiscal.
The decision was taken at the meeting of the Central Board of Trustees (CBT), the highest decision making body of the Employees' Provident Fund Organisation (EPFO). The meeting was chaired by Labour Minister Mallikarjun Kharge.
"A decision has been taken to pay 8.5 per cent interest on PF deposits ... but we have expressed our reservations as we wanted higher interest rate," said D L Sachdev, secretary All India Trade Union Congress (AITUC) after the CBT meeting.
Earlier, a note prepared by EPFO for consideration of the February 15 meeting of the Finance and Investment Committee (FIC) had said, "... 8.5 per cent rate of interest for the year 2012-13 is feasible."
According to the EPFO's estimates, payment of 8.6 per cent interest rate would result in a deficit of Rs 240.49 crore whereas 8.5 per cent interest rate on PF deposits for current fiscal would leave a surplus of Rs 4.13 crore.
In FIC meeting held on February 15, union leaders refused to discuss the issue regarding payment of interest in the current fiscal because the agenda note for the issue was not provided well in advance to them, sources said adding the note was tabled during the meeting.
They had said the EPFO's estimates would now be directly tabled before CBT meeting held today, for final approval.
The notification on interest rate is issued by the government after concurrence with the Finance Ministry.
Usually, EPFO announces interest rate at the beginning of the year, but there has been a delay this time. Trade unions have been pressing for an early meeting of the CBT to decide on the interest rate for the current fiscal.
EPFO had paid 8.25 per cent interest to its subscribers for 2011-12, lower than the 9.5 per cent disbursed in 2010-11.