Is the new NHS pension scheme shariah compliant?

Q: The CARE (Career Average Revalued Earnings) is a type of defined benefit pension scheme. A defined benefit scheme guarantees a certain level of benefit at retirement, according to a fixed formula. In this respect it is similar to the current final salary sections of the NHS Pension Scheme. In a CARE scheme your pension is based on your pensionable pay right across your career. The pension you earn each year is based on pensionable pay in that year and is increased by a set revaluation rate, linked to inflation, for each year up to retirement or leaving. The final pension is calculated by adding together the pension earned in each year of membership. This came out in April, 2015. Basically, Each year you will earn a pension equal to 1/54 of your pensionable pay. So long as you are still paying into the scheme this will be revalued every year in line with increases to the Consumer Prices Index plus 1.5%. What you pay monthly is variable dependent upon your annual salary (between 5.2-14.7%). Can I opt for such pension?

الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب

A: The Career Average Revalued Earnings (CARE) pension scheme, a defined income scheme, is permissible provided the job role for which the pension is earned is permissible. The previous position of the Al-Qalam was that defined income schemes were not permissible on account of the uncertainty they entailed. See: However, the position of the Al-Qalam panel has now changed with regards to such pensions. Further to discussions with one of my esteemed teachers, it is now the opinion of the Al-Qalam Panel that defined income pensions may be tolerated and deemed permissible as, despite the gross uncertainty they entail, the uncertainty does not lead to inordinate dispute between the pension holder and pension provider.


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