Q: I am a teacher in a secondary and one thing that is offered to all teachers is the Teacher Pension scheme. such a scheme or any pension scheme deemed as halal, would it be better to opt-out of such schemes? It is the teacher pension scheme offered by the government.
Each month an amount from my pay packet would come out and this figure would be topped up by my employer. The money goes into a pension fund, although I have been led to believe that this is not for investment purposes rather it is used to pay the pensions of others who are of retirement age and this
الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب
A: It would appear that your pension is a final salary/defined benefit scheme.
Unfortunately, such schemes do not comply with shariah principles although the pension received does itself tend to be halal. For a full discussion see: http://alqalam.org.uk/wp-content/uploads/pensions-and-gross-uncertainty-revised-V1aa.pdf One should opt of the scheme and join a shariah compliant defined income scheme.