Fatwa ID: 08787

Answered by Alimah Humairah Badshah

Question:

Every month some amount is deducted from my salary as an employee contribution in the pension fund of our company. And against this contribution the employer also contribute toe some if not the same amount. This accrued contribution cant be withdrawn until the retirement or near retirement. Do I need to pay the zakat of this fund in pension account?

In the name of Allah, the Most Gracious, the Most Merciful

Answer:

Whether one is required to pay zakat on one’s pension depends on which type of pension one is contributing to. Defined contribution schemes (where a party or multiple parties, such as an employee and their employer, contribute money into a ‘pot’ which is invested until the employee retires) do necessitate zakat.

This is because the money in the ‘pot’, even though it is withheld for a long period of time, is still within the ownership of the employee. It can be conceptualized as a kind of long-term debt with a fixed payment date. These kinds of debts require the one who owns the money to pay the zakat, even if they are not currently in possession of the money, rather than the zakat being a burden upon the debtor.

However, since the money is not currently in the employee’s possession, it is not necessary for one to pay the zakat every year if one is not able. One can instead pay all the years of zakat which were due upon receiving the pension money. This would require one to log the amount due each year.

Keep in mind that it is crucial for one to keep an accurate log every single year in order to correctly calculate the amount of zakat. It would be advisable to make multiple backups of the log and set reminders for oneself so that one records the zakat due every single year if one chooses not to pay annually with the rest of one’s zakat.

References:

وَأَمَّا سَائِرُ الدُّيُونِ الْمُقِرِّ بِهَا فَهِيَ عَلَى ثَلَاثِ مَرَاتِبَ عِنْدَ أَبِي حَنِيفَةَ – رَحِمَهُ اللَّهُ تَعَالَى – ضَعِيفٌ، وَهُوَ كُلُّ دَيْنٍ مَلَكَهُ بِغَيْرِ فِعْلِهِ لَا بَدَلًا عَنْ شَيْءٍ نَحْوُ الْمِيرَاثِ أَوْ بِفِعْلِهِ لَا بَدَلًا عَنْ شَيْءٍ كَالْوَصِيَّةِ أَوْ بِفِعْلِهِ بَدَلًا عَمَّا لَيْسَ بِمَالٍ كَالْمَهْرِ وَبَدَلِ الْخُلْعِ وَالصُّلْحِ عَنْ دَمِ الْعَمْدِ وَالدِّيَةِ وَبَدَلِ الْكِتَابَةِ لَا زَكَاةَ فِيهِ عِنْدَهُ حَتَّى يَقْبِضَ نِصَابًا وَيَحُولَ عَلَيْهِ الْحَوْلُ. وَوَسَطٌ، وَهُوَ مَا يَجِبُ بَدَلًا عَنْ مَالٍ لَيْسَ لِلتِّجَارَةِ كَعَبِيدِ الْخِدْمَةِ وَثِيَابِ الْبِذْلَةِ إذَا قَبَضَ مِائَتَيْنِ زَكَّى لِمَا مَضَى فِي رِوَايَةِ الْأَصْلِ وَقَوِيٌّ، وَهُوَ مَا يَجِبُ بَدَلًا عَنْ سِلَعِ التِّجَارَةِ إذَا قَبَضَ أَرْبَعِينَ زَكَّى لِمَا مَضَى كَذَا فِي الزَّاهِدِيِّ

(وَمِنْهَا حَوَلَانُ الْحَوْلِ عَلَى الْمَالِ)

Al-Fataawa Al-Hindiyyah (Daar Al-Fikr, https://shamela.ws) v.1 p.175

وَمِنْهَا كَوْنُ النِّصَابِ نَامِيًا) حَقِيقَةً بِالتَّوَالُدِ وَالتَّنَاسُلِ وَالتِّجَارَةِ أَوْ تَقْدِيرًا بِأَنْ يَتَمَكَّنَ مِنْ الِاسْتِنْمَاءِ بِكَوْنِ الْمَالِ فِي يَدِهِ أَوْ فِي يَدِ نَائِبِهِ وَيَنْقَسِمُ كُلُّ وَاحِدٍ مِنْهُمَا إلَى قِسْمَيْنِ خِلْقِيٌّ، وَفِعْلِيٌّ هَكَذَا فِي التَّبْيِينِ فَالْخِلْقِيُّ الذَّهَبُ وَالْفِضَّةُ؛ لِأَنَّهُمَا لَا يَصْلُحَانِ لِلِانْتِفَاعِ بِأَعْيَانِهِمَا فِي دَفْعِ الْحَوَائِجِ الْأَصْلِيَّةِ فَتَجِبُ الزَّكَاةُ فِيهِمَا نَوَى التِّجَارَةَ أَوْ لَمْ يَنْوِ أَصْلًا أَوْ نَوَى النَّفَقَةَ وَالْفِعْلِيُّ مَا سِوَاهُمَا وَيَكُونُ الِاسْتِنْمَاءُ فِيهِ بِنِيَّةِ التِّجَارَةِ أَوْ الْإِسَامَةِ، وَنِيَّةُ التِّجَارَةِ وَالْإِسَامَةِ لَا تُعْتَبَرُ مَا لَمْ تَتَّصِلْ بِفِعْلِ التِّجَارَةِ أَوْ الْإِسَامَةِ ثُمَّ نِيَّةُ التِّجَارَةِ قَدْ تَكُونُ صَرِيحًا وَقَدْ تَكُونُ دَلَالَةً فَالصَّرِيحُ أَنْ يَنْوِيَ عِنْدَ عَقْدِ التِّجَارَةِ أَنْ يَكُونَ الْمَمْلُوكُ لِلتِّجَارَةِ سَوَاءٌ كَانَ ذَلِكَ الْعَقْدُ شِرَاءً أَوْ إجَارَةً وَسَوَاءٌ كَانَ ذَلِكَ الثَّمَنُ مِنْ النُّقُودِ أَوْ الْعُرُوضِ

Al-Fataawa Al-Hindiyyah (Daar Al-Fikr, https://shamela.ws) v.1 p.173

Only Allah (عز و جل) knows best.

Written by Alimah Humairah Badshah

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham