Question

Assalamualaykum I have a investment scheme at my workplace which goes with my pension scheme called brass. Every month they take money from my salary and invest in various bonds stocks and shares. My question is would it be permissable for me to join this scheme. I have attached a copy of files which they show how they investment the money. Also if I was to request I want a more ethical investment which coincide with my religion can you advise me what kind of investment is impermissible according to shariah.
I do not want my money to be invested in haraam investment hence why I want to be sure before I join that I am not going to be getting haraam money.
Jazakallah

Answer

If you work in the public sector and your pension scheme is a defined benefit scheme then the pension scheme will be lawful. However, if your pension scheme is a defined contribution scheme then based on the files attached the scheme will be unlawful. This is based on the fact that eventually the fund will invest in money markets which are unlawful to invest in due to interest based transactions taking place.

Even if the investments are not in money markets one would have to look into the companies which are being invested into and determine whether they meet the required specifications for investment to be lawful. This can become quite complicated and impractical.

You should look for shari’ah compliant/halal pension funds to invest your money into. You may find the following article helpful in locating a shari’ah compliant pension.

https://www.islamicfinanceguru.com/investment/is-my-pension-halal-a-really-really-simple-guide-ifg/

Answered by:
Ifta Research Fellow

Checked & Approved by:
Mufti Abdul Rahman Mangera
Mufti Zubair Patel