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Before I get my monthly wages, I am taxed. Some of this tax money goes towards my state pension account. So I am assuming the government has an account where they know how much of my tax money has gone towards my state pension. This is not voluntary on my part, it's the law in the country I live in.

My question is, do I have to pay zakat on the money in this government account to which I have no access too? I don't even know how much is in there.

I won't get any of that money until I retire. I will probably get about $100 a week.

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According to the Hanafi school, one of the prerequisites for wealth to be zakatable is that it has actually been given to you. As pension funds are wholly inaccessible to you until you retire, and the wealth in them has never actually been given to you as it was deducted from your income without your control, zakat need not be paid on it. Even after you retire, you will still only need to pay zakat on the wealth that has actually been released to you.

This is a fundamental difference from providing your own wealth to, for example, a 401k or an RRSP based retirement fund. In those cases, the wealth was actually yours to begin with and dispose of as you wish, and you have taken the option to invest it: Zakat would be payable on those assets.

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  • Perfect, that answers 2 of the 3 questions I had in mind. The only part left is work based pensions. According to the country I live in, they are almost, but not entirely forced on your. I.e. you're auto enrolled into it and for now, you can opt-out after being auto-enrolled into it if you want, but this might change in the future apparently. Anyway. These work-based pensions, the money is deducted before it reaches your account. Is zakat to be paid on such funds? I'm guessing yes because we can opt-out for now? But I'm getting no in the future if the opt-out option is removed? – user3550 Feb 21 '14 at 16:35
  • Either way, you can't access the money until you retire, after which it's paid to you as a monthy/weekly wage. – user3550 Feb 21 '14 at 16:42
  • @user3550 I believe that would be the same as a 401k/RRSP; as it's now your choice to keep the money invested, it counts as wealth owned (even if you can no longer access it). You can read a relevant fatwa here: seekersguidance.org/ans-blog/2013/05/27/… – goldPseudo♦ Feb 21 '14 at 17:29
  • @goldPseduo, that link seems to be based on a different type of pension. The work based pension I am talking about is different because even though you can opt-out of it, you cannot get access to that money until you retire. – user3550 Feb 22 '14 at 12:47
  • I should probably continue in another question because you've answered my original question. – user3550 Feb 23 '14 at 9:13

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