Zakaat On A Pension Fund

Zakaat is not payable on a pension fund that is enforced by the employer, as long as the employee does have possession or access to the funds. On receiving part of the funds, the employee will be liable to pay Zakaat (on the payout received), if the funds are still available when calculating his yearly Zakaat.

As for the two thirds that haven’t been released as yet, Zakaat is not due on such amounts as the employee doesn’t have access to the funds. Yes, as explained above, he will pay Zakaat on the amounts received during his lifetime (from the remaining two thirds) when calculating his yearly Zakaat, if it is still in one’s possession at the end of each Zakaatable year. If the funds received have already been spent (prior to calculating one’s yearly Zakaat), then such funds will be exempted

from Zakaat.

The pension payout that one receives after one’s demise does not form part of one’s estate, thus the employee may list a particular individual as a beneficiary of the payout, or he may list some or even all the heirs at the time of his demise as beneficiaries. That portion will not form part of his estate; rather it will belong to the beneficiary/ies who has/have been designated as the beneficiary/ies.