Must defined pension schemes be included for Zakat calculations?

Q: I have a voluntary pension contribution at work. I am able to see the value of my pension pot and I am able to dictate where it is invested in, but as I am not at pensionable age I have no access to that money yet.

I am Hanafi and from your research paper on your website I believe the conclusion is that I do not need to include my work pension in my zakat calculations until one lunar year after I receive my pension, is this a correct conclusion to reach?

Also I have previously paid zakat on my pension so can I now deduct this previous zakat against the calculated amount I owe in the future?

A: The above concept has not been understood correctly. The non-liability of zakat relates to defined income schemes and not to your pension scheme which is a defined contribution scheme. Additionally, once the pension is received under a defined income scheme, the liability of zakat depends upon one’s personal circumstance. If one is already owner of the nisab then one will simply give zakat upon all zakatable assets when the normal zakat date arrives.  If one is not already owner of the nisab, then zakat will be given at the passage of one lunar year if one still owns the nisab value.

And Allah knows best.

Mufti Mohammed Zubair Butt

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