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Questions on khums on pension contributions

Q:

Salams,

I have two questions on whether khums in applicable for amounts contributed to a defined benefit pension scheme.

My employer operates this scheme where every month I can contribute a portion of my salary to this account.  This is a choice I have, if I do not contribute then this amount will just be paid to me as salary every month, after tax deductions.  If I choose to contribute this amount to the pension account then I cannot access these funds until I reach retirement age, after which I can draw the funds as pension. Will Khums be due on these amounts as saved over the many months till retirement, or do I only pay Khums on this once I retire and receive this money as pension?

In addition to the above, my employer also contributes an extra amount to this pension account as a separate payment. I cannot access these funds and there is no choice for me to take this as salary. This money will only be available to me once I reach retirement age when I can draw it as a pension. Will khums be due on this employer payment to the pension account as the payments are made to the pension fund or do I only pay khums on this once I retire and receive this money as pension?

A:

Salam Alaikum

It’s good to be concerned about halal income.

In the first case, as your pension is a saving then khums needs to be paid on that amount, on your annual khums date (though that amount is not in your hand).

Unlike the second case where saving is taking place without your permission, so you dont have to pay the khums on that amount, on your annual date unless you receive it.

Regards

Syed Asad Jamal Zaidi