Series of Answers by the Eminent Scholar Ata bin Khalil Abu al-Rashtah, Ameer of Hizb ut-Tahrir, to Questions from the Visitors of his Facebook Page "Fiqhi"
Answer to a Question
Mohammad Abdul Basir
Question:
As Salamu Alaykium Sheikh, may Allah (swt) preserve you and give the victory through your hands, ameen.
In many Western countries we have a scheme called the Pension scheme. This is when the employee contributes a certain amount of his wage and gives it to the company he works for. The company also put in a certain amount of money, which is separate from his wages, depending on the amount the employee puts in. When the employee reaches a certain age to retire from the company, the company will give the employee a pension to which he contributed and they put in money as well.
Some companies invest the contribution given by the employee into other investments like buying shares in companies that trade in alcohol and interest and some companies to do invest the money at all.
Could you please tell us whether this type of Pension scheme is permitted in Islam, as many of us in my location have been signed up by our companies because it has been made mandatory by the government.
I hope my question is clear.
Jazakumullahu Khair
Wa Alaykumus Salam wa Rahmatullahi Wa Barakatuhu
Abdul Basir
Answer:
1- An employer may agree with an employee to provide medical treatment or a pension after a certain age in exchange for a portion of the worker's wage being deducted over a specific period, in addition to another portion paid by the employer. This action by the employer towards his employees is permissible as long as this matter is attached to the contract concluded between the employer and his employees as a condition in the employment contract. This is because the original contract is an Ijarah (employment) contract, which is well-known, and the employer's commitment to treat the worker or provide a pension is a condition attached to the employment contract. Conditions in contracts are not prohibited unless a text exists to forbid them, such as making the haram (prohibited) halal (permissible) or the halal haram. They do not require a text to permit them; rather, they only require the absence of a text that forbids them. On the authority of Kathir bin Abdullah bin Amr bin Awf al-Muzani, from his father, from his grandfather, the Messenger of Allah ﷺ said:
وَالْمُسْلِمُونَ عَلَى شُرُوطِهِمْ إِلَّا شَرْطاً حَرَّمَ حَلَالاً أَوْ أَحَلَّ حَرَاماً
"And the Muslims are bound by their conditions, except for a condition that forbids what is permissible or permits what is forbidden." (Reported by at-Tirmidhi). (See The Islamic Personality, Volume 3, Chapter: The Rule of Al-Wadh’ – The Condition).
From another perspective, what is given to the worker consists of a portion of the worker's wage that was deducted, plus portions added by the employer. The employer has the right to give his worker whatever amount he wishes from his own money.
2- However, if the contract for medical treatment or the pension is a standalone contract—for example, if an institution is established and announces to the public that whoever wants treatment when ill or wants a pension after a certain age should pay us such-and-such monthly amount—this is not permissible because it is a contract that involves jahalah (uncertainty). This type of contract is void (batil) and not permitted.
3- Regarding the institution investing the funds in haram... if this depends on your consent—meaning if you agree to invest the fees you pay in riba (interest), it happens, and if you do not agree, it does not—then in this case, it is not permissible for you to agree to the investment in riba. However, if the investment occurs without your consent, meaning it is not by your choice but rather they invest it without your consent according to the mandatory state law, then there is no sin upon you.
Summary: If you are an employee and, according to the mandatory state law, the employer deducts a portion of your salary and adds a portion to it, and he invests these funds without you having a say in it—i.e., without your consent, but rather according to the mandatory state law—and after a certain age he gives you a pension or medical treatment... then it is permissible for you to take the pension and the treatment. This is because all of that is in exchange for the employer's deduction of a portion of your salary, and it is done in a mandatory manner.
This is what I find most weighted, and Allah is All-Knowing, All-Wise.
Your brother, Ata bin Khalil Abu al-Rashtah
04 Rabi’ al-Akhir 1440 AH Corresponding to 11/12/2018 CE
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