Pension provider Options
UK, formerly known as Carey Pensions, has joined forces with Halal investment
specialists Wahed Invest to launch a fully diversified, Sharia-compliant
workplace pension.
The new pensions offering
comprises Sharia-compliant funds selected for their adherence to Muslim values
and also ensures all returns from these funds are Halal.
This includes investments
in Sukuk funds (Islamic Bonds), Gold and the Islamic Global Equity Index.
Sharia-compliant investing
follows the belief that all natural and depletable resources should be managed
for future generations.
The investment process also
involves financial screening to ensure securities are Sharia-compliant and
investments in heavily indebted companies is avoided.
In addition, Riba (interest)
is neither held or received, while investing in industries including alcohol,
gambling, firearms, tobacco is also forbidden.
According to Christine
Hallett, managing director of Options UK, there is a noticeable gap in this
market with many employees not being able to access their auto-enrolment
contributions as the funds they are invested in go against their faith.
She said: “We have been
involved with Sharia compliant pensions since auto-enrolment began, so this is
not new to us.
“This workplace pension
brings something different to the marketplace and we are the first provider to
offer a completely diversified halal investment offering.
Cambodia, which has so far
withstood the worst of the pandemic’s health effects, is at risk of financial
meltdown due to millions of smallish loans like Sambath’s, which are ballooning
into insurmountable debt as schools, factories and businesses remain closed.
Cambodians are entangled in
a microfinance system that was intended to alleviate poverty after decades of
war, genocide and political
turmoil; providing small loans to people without adequate access to formal
banking services. But unlike other countries where microfinance
lending is run by charities or subsidized by the government, Cambodia’s
sprawling system is for-profit and privately run, charging interest rates as
high as 18% and — with virtually no cap on how much a borrower can take out —
many loans that aren’t “micro” at all, reaching into the tens of thousands of
dollars.
Advocacy groups warn that
predatory practices — including reports of intense pressure from lenders and
coerced sales of homes and property — threaten to unleash a human rights crisis
in a country where a $4,000 loan represents more than double the average annual
income.
Borrowers were struggling
even before the pandemic. And while the Southeast Asian nation has recorded
fewer than 250 infections and no deaths due to the virus, the economic shutdown
has erased hundreds of thousands of jobs in construction, tourism and export
manufacturing, which includes the crucial garment and footwear sectors.
With the shutdown expected
to last several more months, the World Bank estimates that
at least 1.76 million jobs could be lost in a country of 15 million and that
the poverty rate could rise from 13% to 24%
“This product also means
that IFAs have a unique pension platform capable of underpinning retirement and
wealth management planning within the Muslim community.”
Ms Hallett said there was
already an appetite building for this product both among the Muslim community
and employers.
She added: “We have already
been speaking to Islamic Finance Council and they are on board because there is
nobody else who has approached a Shari-complaint pension scheme in this diverse
way.”
Mehdi Benslimane, head of
strategy at Wahed, said: “People are constantly reminded of the need to make
their own provision for the time when they retire. Workplace pensions are one
of the most tax-efficient means of doing so with the added benefit of your
employer paying in as well to boost the savings amount.
“With the launch of a
diversified Sharia-compliant halal workplace pension in conjunction with our
master trust partners, Options UK, ensures that Muslim investors have the
opportunity to save for their retirement, while adhering to Islamic values.