Preservation Funds

Answered according to Hanafi Fiqh by

Q. It was compulsory for me to have a pension fund with my company. However, I transferred from my first company to my second company and I was given an option by my first company to either take possession of the full amount after deducting tax or to transfer my pension fund to a preservation fund. In this scenario, which portion is Zakaatable and which portion forms part of my estate?

A. In the enquired situation, since you were given an option to access the entire amount of your compulsory pension fund after deducting tax or to transfer your compulsory pension fund to your preservation fund after retiring or transferring, the entire amount will be Zakaatable which will also form part of your estate.

Allah Ta’ala Knows Best

Mufti Ismaeel Bassa

This answer was collected from, which is a fatwa portal managed by Mufti Ismaeel Bassa from South Africa.

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