Fatwa #311226 November 2014India
Retirement fund
Question
My father used to work at the post of Officer in Allahabad Bank,India. Last year he took VRS(Voluntary Retirement) from the bank citing his ill health so as to abstain from Salary of Bank.Ques is: Is it allowed to use the pension one receives from the Bank? If yes under wchich heads can it be used? A prominent Mufti of "Jamia Qasmia DarulUloom Shahi,Moradabad(U.P.) says it can utilised for personal use only. Kindly clarify
Answer
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
In order for us to consider whether VRS is Shariah Compliant or not, we need to know the background of the VRS. Did your father contribute to the retirement fund? If so, was it compulsory or voluntary? It may be advisable to refer the issue to a local Mufti who is experienced and knows the details of the VRS for guidance.
And Allah Ta’āla Knows Best
Hisham Dawood
Student Darul Iftaa
Chicago, USA
Checked and Approved by,
Mufti Ebrahim Desai.