Category: Business Matters
Fatwa#: 39621
Asked Country: South Africa

Answered Date: Feb 11,2018

Title: Pension Fund payout.


Monday 11 December 2017


Assallamu Alaikum Wa Rahmatullahi Wa Barakaatuh


Respected Mufti Saheb


Your valued ruling in the following matter is required.




Facts Established:


1             My late brother was employed by Edgars and as a condition of employment had a compulsory pension fund with them. He had no option in accepting or declining being part         of the fund.


2             At retirement he was compelled in terms of the (The Pension Funds Act ) of South Africa to                comply with the following :

               2.1         Allowed to draw (commute) a maximum of one third as a lump sum from the                                                                 pension in cash.

               2.2         To invest  (two thirds) of the payout in a compulsory monthly pension  based                                             portfolio with a registered financial institution. Apart from a prescribed monthly                         pension income, he was not allowed access to the funds under any circumstances                     whatsoever.         


3             One third of the payout  was cashed in by the Marhoom for his use.


4             The Marhoom  invested the  remaining two thirds with :

               (i)            Oasis (living annuity) and

               (ii)           Sanlam (living annuity).


The above mentioned compulsory investments were in line with legislative regulations for Pension, Provident, Retirement Annuity and Preservation Funds in South Africa and thus he had no choice but to comply.


5             My brother was not married and had no children.


6             He had no will in place.


7             For both the above mentioned annuities he nominated one of his siblings as the sole (100%)                                         beneficiary.



For Sharee distribution purposes, does the payout go to the estate of my late brother or the nominated beneficiary?



Moosa Mayet


In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

The pay-out of the remaining two thirds of the pension fund will be awarded to the nominated beneficiary. The pay-out will not form part of the estate[i].

And Allah Ta’āla Knows Best

Muhammad Yusuf bin Moulana Abdur Rahim Khan

Student Darul Iftaa
Chatsworth, Durban, KZN, South Africa 

Checked and Approved by,
Mufti Ebrahim Desai.

[i] Contemporary Fatawaa by Justice Mufti Taqi Usmani Pg 251

النتف في الفتاوى للسغدي (1/ 521)

هبة الْكَافِر للْمُسلمِ

واما هبة الْكَافِر للْمُسلمِ فجائزة ايضا سَوَاء كَانَت فِي دَار الاسلام اَوْ فِي دَار الْكفْر

الأصل للشيباني ط قطر (3/ 419)

باب هبة المسلم للذمي والذمي للمسلم والعوض منهما

قلت: أرأيت مسلماً وهب لنصراني (3) هبة أو ليهودي أو مجوسي هل يجوز ذلك؟ قال: نعم. قلت: وكذلك الذمي لو كان هو الواهب للمسلم؟ قال: نعم. قلت: وهما في ذلك بمنزلة المسلمين؟ قال: نعم.

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