Question Summary:
Are Muslims allowed to put funds into this scheme?

Question Detail:

I live in Fiji and there is a system in place where every week From my wages I have to contribute 8% and my employer has to give 10% over my wages. Then these funds are kept in a separate organization called FIJI NATIONAL PROVIDE FUND (FNPF). Where we do get a little bit of interest and is applicable for withdrawal in retaiment or in guinue need for funds. Are Muslims allowed to put funds into this scheme. please refer to www.fnpf.com.fj

Answer :

In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh
Conventional provident/pension funds are impermissible since the majority of the funds are invested in non-permissible financial products and companies. 
 
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 dividends and all other benefits accrued from the provident fund will be permissible and considered as a voluntary offering (Hibah) from the side of the company/employer. One will not be held responsible for taking out the conventional provident/pension fund. 
 
However, if the pension/provident fund is voluntary and one is not compelled by company policies to participate in the fund, then it is not permissible for one to participate in the fund since the majority of the funds are invested in conventional financial products and companies.
 
With regards to your specific question, we understand that Fiji National Provident Fund (FNPF) offers compulsory and voluntary funds. Moreover, the funds are invested into different conventional asset classes and financial products such as conventional bonds, mortgages and certificates of deposit (CD’s). Therefore it is impermissible to voluntarily participate in the fund. We advise you to search for alternative Shariah Compliant alternatives in your country. Alternatively you may discuss the issue of establishing a Shariah Compliant fund with senior and influential members of your community.
 
 
 
And Allah Ta’āla Knows Best
Ismail Desai,
Darul Iftaa
 
Checked and Approved,
Mufti Ebrahim Desai.