Is zakaat payable on pension, provident fund or retirement annuity?

“We've previously answered an inquiry regarding Zakat on voluntary retirement savings plans where the employer also contributes. For details, kindly see Ask Imam #29670.”

“1. One is not obligated to pay Zakāt on funds that have not come into one’s complete ownership. The pension fund and retirement annuity in reference can only be legally accessed on resignation or retirement. Accordingly, you will be only obligated to pay Zakāt on the funds once paid out by the retirement fund.”

“Zakaat is not payable on a pension fund that is enforced by the employer, as long as the employee does have possession or access to the funds. On receiving part of the funds, the employee will be liable to pay Zakaat (on the payout received), if the funds are still available when calculating his yearly Zakaat.”

“One may subscribe to a retirement annuity fund voluntarily from his side, or a retirement annuity fund may be enforced upon one by his employer. If one voluntarily subscribes to a retirement annuity fund that is Shariah compliant, then the fund will be Zakaatable.”