Question:
I work for a company which operates a compulsory provident fund scheme. My company deducts 4% from my monthly salary and adds equal amount to it from its funds and then the total 8% is invested into different pension schemes. At the end of the year the company adds 12% (fixed rate) of the total amount accumulated in my provident fund from the start of my service. The same process is repeated every year, till the retirement.
My understanding: The 12% added at the end of the year is company’s strategy to accommodate decreasing value of currency. For employees it is a gift/bonus from company side, employees are not responsible how company earns it, thus making it Halal for them?
Answer:
In the Name of Allāh, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-raḥmatullāhi wa-barakātuh.
In principle, one may participate in a provident fund if one is compelled by company regulations and policies to participate in such a fund. Moreover, the ROI (Return on investment) and all other benefits accrued from the provident fund will be permissible and considered as a voluntary offering from the side of the company. Therefore, the annual 12% and all other benefits given by the company are permissible and Halaal.
And Allah Ta‘ālā Knows Best
Moulana Ismail Desai,
Durban, South Africa
Checked and Approved by,
Mufti Ebrahim Desai.
DISCLAIMER – efiqh.com questions
efiqh.com answers issues pertaining to Shar’iah. Thereafter, these questions and answers are placed for public view on www.efiqh.com for educational purposes. However, many of these answers are unique to a particular scenario and cannot be taken as a basis to establish a ruling in another situation or another environment. efiqh.com bears no responsibility with regards to these questions being used out of their intended context.
- The Shar’iah ruling herein given is based specifically on the question posed and should be read in conjunction with the question.
- Efiqh.com bears no responsibility to any party who may or may not act on this answer and is being hereby exempted from loss or damage howsoever caused.
- This answer may not be used as evidence in any Court of Law without prior written consent of efiqh.com
- Any or all links provided in our emails, answers and articles are restricted to the specific material being cited. Such referencing should not be taken as an endorsement of other contents of that website.