Contributions to pension funds

Question ID: 27649

As salaamu alaykum. I have 2 scenarios that needs advise on the contributions to pension funds

1.interest growth on pension contributions. the salary structure is on cost to company and it is a condition of contract to contribute from this a % to the pension fund. The institution to whom the contributions are paid, views the contribution as 50% employee and 50% employer. From the employers 50% all costs related to the contribution are deducted. The balance of the contribution then has interest growth.

2. In my previous employment some 15 years ago, my pensions contributions due to the rules of the fund could not be paid out when I resigned and had to remain till pensionable age. I do not have any idea what contribution was mine ie employee and what was the employers from the total amount. This has now matured to 4 times its original amount. The rule is that one third will be paid out immediately and the balance of the total amount will be paid in an annuity.

In both instances income tax will have to be paid on the total.

Please advise what portions are permissible and how can i dispose of the amount that is not permissible.

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Asked on January 19, 2009 12:00 am
Private answer
Estimate your contribution in both cases. Keep that. The rest should be given to any desercing person. If the contribution from your side was obligatory whilst the addition was 'bonus' then you may keep all.
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Answered on January 19, 2009 12:00 am