Question Summary:
Zakaat on retirement annuity

Question Detail:

 
I have a retirement annuity in my personal name.I have been taking out zakaat on the current market value, however I was told by an Alim that Zakaat on retirement annuity is only on what has been contributed for the year, please advise.
 
I have not contributed anything towards the retirement annuity and the money will only be available at the age of 55.

Answer :

In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh
We understand that you do not directly contribute towards your retirement annuity. The funds are contributed by your company or another individual/entity. Therefore according to Shariah, the funds contributed towards the retirement annuity will be considered to be a Hibah (gift) from the side of your company or another individual.
 
With regards to your specific question, you are not obligated to pay Zakaat on such funds since they have not come into your complete ownership (Milk Tam) nor can they be legally excessed until the mandatory retirement age. You will therefore be only obligated to pay Zakaat on the funds once paid out by the retirement fund.[1]
 
And Allah Ta’āla Knows Best
 
Ismail Desai,
Darul Iftaa
 
Checked and Approved,
Mufti Ebrahim Desai.
 
 
 
 
 

 
 
 
Assalāmu `alaikum Warahmatullāhi Wabrakatuh,
Respected Brother/Sister
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The Darul Iftaa banking details are as follows:
1. Type: Lillah
Bank: FNB
Branch: 223726
Account Number: 62292858910
2. Type: Zakaat
Bank: FNB
Branch: 220629
Account Number: 62315858136
 
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Jazakallah Khayr.
 
Admin - Darul Iftaa (On behalf of Mufti Ebrahim Desai)