Is Zakat Required for Career-Average Pensions?

No, Zakat is not required for Career Average (CARE) pensions. 

The amount accumulated in a CARE pension throughout your career is not subject to Zakat, even if deductions are made from your salary for the pension.

Here are the key points to consider:

• Zakat and CARE pensions: 

Zakat does not apply to the contributions made to a Career Average pension plan. Even though pension deductions are taken from your salary, these amounts are not eligible for Zakat.

• Understanding Zakat obligations: 

Zakat is generally required on wealth that is in your possession for a full lunar year and meets the minimum threshold (nisab). However, since the pension contributions are not fully available to you until retirement, they do not meet the criteria for Zakat during the accumulation period.

• Retirement payouts: 

When you eventually begin receiving your pension, the payout may be considered your income for the year. Zakat may be due on the amount if it reaches the nisab threshold and is held for a full lunar year.

• Temporary nature of pension deductions: 

Pension contributions are temporarily withheld and not fully in your control. Therefore, they are not subject to Zakat until you receive them as part of your retirement income.

Thus, A CARE pension does not require Zakat while you are actively contributing. However, when you begin receiving the pension after retirement, you may need to assess it for Zakat if it meets the necessary criteria.

And Allah knows best!