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Employer match pension

Fatwaa ID: 618

Question:
Salam alaykum. Some pension programs for goverment jobs and also from private companies match a certain amount of investment every year. For example robinhood has am IRA which matches 1 percent on each dollar invested. Is it halal to make investments where the employer matches a certain percent ?

Answer:
In the Name of Allaah, the Most Gracious, the Most Merciful.
As-salaamu ‘alaykum wa-rahmatullaahi wa-barakaatuh.

It is permissible to make investments wherein the employer matches or contributes a certain percentage. That would be regarded as a gift from the employer. However, it should be noted that if the pension program is voluntary and the employer invests towards Shari’ah non-compliant avenues, then you may only keep the capital and the profits of the halaal percentage. The dividends and profits from the haraam percentage must be disbursed in charity without any expectation of reward. You should advise your employer to choose Shari’ah compliant avenues. It goes without saying that your investments must be towards Shari’ah compliant avenues.

And Allaah Ta’aala knows best.
Mufti Muajul I. Chowdhury
Darul Iftaa New York
https://askthemufti.us/

07/26/1444 AH – 02/17/2023 CE | AMG1-2812

وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين

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