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  • Private Company Provident Fund (PF)

    Posted by Ashraf Khan on July 1, 2021 at 9:47 am

    As’salam o alaikum,

    I am working in a private company. The company deducts 10% of basic pay every month and add to it the same amount and park it in PF. The PF is invested in various companies/schemes (halal businesses) but a portion of the PF is also placed in “interest-based bank accounts”.

    Upon retirement the total amount i.e. my actual deduction plus the same amount contributed by the company plus the earnings (including interest from “interest-based bank accounts”) is returned.

    1) I DON’T have the option to opt out of this fund

    2) I DO have the option to STOP my PF investment and receive only twice the actual deduction (my share + equal contribution by the company) without any profit (both from “interest-based bank accounts” and halal investments)

    3) The PF with or without profit can be received only upon retirement

    4) PF can also bear a loss (it has actually happened once in my 15 years career)

    5) At retirement, I can only know a) my deductions b) company contribution and c) the total earnings. BUT not the breakdown of earnings to know the share from “interest-based bank accounts”.

    I think that my deductions and company contribution (sort of a gift) are HALAL. What about the profit over PF as part of it is from “interest-based bank accounts”?

    Thanks and jazakALLAH,

    Ahsan replied 3 years ago 2 Members · 1 Reply
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