Fatawaa


Subject : Ruling on Contributing in Pension Fund of Jordan Agricultural Engineers Association
Fatwa Number : 3513
Date : 25-06-2019
Classified : Current Financial Issues
Fatwa Type : Search Fatawaa

Question :

What is the ruling of Sharia on contributing in the pension fund of the Jordan Agricultural Engineers Association, (see enclosed copy of pension system)?



The Answer :

Praise be to Allah the Lord of the Worlds.


Funds established by different parties, public or private, embody a form of social solidarity encouraged by society. Actually, paid contributions are donations, yet they are conditional and this is permissible in Sharia.


The enclosed pension system referred to above is cooperative insurance and it is permissible by consensus of the majority of modern jurists. It rests on cooperating in risk taking and it doesn`t fall within the framework of pure financial netting. This way, delay penalties imposed on late contributions aren`t usurious, because usury is embodied in pure financial netting contracts as well as usurious loans and debts; whereas, cooperative insurance doesn`t fall under any of these.


In conclusion, delay penalties taken by the above Fund aren`t usurious. Therefore, it is permissible to contribute in that Fund. And Allah the Almighty knows best.







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