Zakat On Pension cont: 2

Zakat On Pension cont: 2

Question:

As SalaamuAlaikum,

Jazakallah for the answers and advice.

To clarify. For the transfer of monies to the preservation fund received on my first resignation (received 6 years ago) I would need to calculate the Zakaat on this for each Zakaat year since the monies were put into the preservation fund. This is as I would have had access to these funds although I had directly put these monies into the fund with the intention of purchasing a living annuity when I reach retirement age. The same would apply for the monies received this year after my last resignation and transferred into a preservation fund.

Jazakallah

Saleh Coovadia

Answer:

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

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

From the time the money became accessible and you moved the money to the preservation fund, the money in the fund became Zakatable for the upcoming Zakat year, not for the previous years. Thus, if you moved the money to the fund six years ago, it was necessary for you to include the money in your Zakatable assets each year from that time onwardsand pay the zakat accordingly.The same concept will apply when you left your other job and moved the money to the fund.

For example, you left your job in 2010 and you moved the money (eg. $10,000) to the preservation fund in June 2010. Your annual zakat year ends on July 31. Thus, when calculating Zakat on your assets on July 31, you will include the $10,000 in the assets and pay zakat accordingly. The same process was to be applied every year thereafter.

And Allah Ta’āla Knows Best

Hammad Ibn Ismail Jogiat

Student - Darul Iftaa

Cambridge, Ontario, Canada

Checked and Approved by,

Mufti Ebrahim Desai.

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