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zaahir.abd
12-15-2006 @ 10:04 AM    Notify Admin about this post
‎‎‎ ‎‎‎ ‎‎‎‎‎ Zaahir bin Hernandez (Newark,N.J.(Amreekaa))
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Posts: 187
Joined: Nov 2002
          
Bismillaah,


Does anyone know anything about how a 401k works?  Is it halaal or haraam for us to get involved?  How does the process go?(EX. money goes here and then this happens.) Have the scholars spoken about it?  

I need an explanation for a brother.  

BarakAllaahu feekum

السلام عليكم ورحمةالله
ابوعبدالرحمن زاهر
سبحانك اللهم وبحمدك
أشهد أن لا إله إلا أنت
أستغفرك وأتوب إليك

salaf78
12-18-2006 @ 10:14 PM    Notify Admin about this post
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Assalaamu 'alaykum wa rahmatullaah,

401K plan is an optional retirement plan. If enrolling, each individual decides how much and into which funds to invest.

The employer presents the employee with a list of various funds from which to choose. The employee may choose a 3, 5 or 10% deduction which comes out from each payroll, and may invest the total into different funds at the same time.

The funds are owned by various companies, domestic and international.Domestic (small) businesses are considered low risk, meaning low risk of loss/decrease of investment made. Naturally, the opposite is true for international (big) businesses.

Most employers will also make contributions (called profit sharing plan) to the employees' 401K account. Most will match ammounts, for example 5 cents to each dollar invested by the holder of the account. Some employers will make small contributions even when the employee is not investing.

The balance may not be withdrawn unless the employee has suffered termination, or if the individual has reached the eligible age for retirement. However, a certain balance must be met in order to make early withdrawals, but penalties do occur.

It should be kept in mind that most, if not all, of these companies deal with ribaa, in one way or another.

As an example, my cousin, upon termination, has requested that he only receives the capital (the money he himself invested), without receiving the growth and the accumulations made by the employer.Alhamdulillaah his request was granted, however it should be kept in mind that any growth aside from the capital, if not collected, will be kept by the company, wallaahu A'lam.

Insha'Allah I hope this sheds some light.

The ruling about having shares in companies and banks

Question: What is the ruling about having shares in companies and banks'? And is it permissible for a shareholder (in a company or a bank) to sell shares, specifically after he has become a shareholder himself, to offices dealing in buying and selling (stockbrokers)? And from that which is possible is selling them (the shares) for more than the price that the shareholder paid. So what is the ruling about the profit which the shareholder makes every year from the value of the shares bought?

Response: Having shares in banks and companies that trade in ribaa is not permissible. And if the shareholder wants to rid himself of any ribaa in his shareholding, then he should sell his shares at market value and take the initial investment only. The rest he should give in charity, and it is not permissible for him to take anything from the profits of his shareholding or interest. However, if the shareholding was in a company which does not trade in ribaa, then it's profits are halaal.

And with Allaah lies all success and may Allaah send prayers and salutations upon our Prophet (sal-Allaahu `alayhe wa sallam) and his family and his companions.

The Permanent Committee for Islaamic Research and Fataawa, comprising -
Head: Shaykh 'Abdul 'Azeez ibn Abdullaah ibn Baaz;
Member: 'Abdullaah ibn Ghudayyaan;
Member: Shaykh 'Abdullaah Ibn Qu'ood
Fataawa al-Lajnah ad-Daa.imah lil-Buhooth al-'Ilmiyyah wal-Iftaa. - Volume 13, Page 508, Fatwa No.8996

and:

Profits from selling shares in interest-based company

Question: I had shares in a company that went bankrupt 25 years ago. The representatives of the company bought shares, with the remainder of the money, in Riyad Bank back then (i.e. 25 years ago). Each share was bought for 1,000 Saudi Riyals, and now the value of each share is 30,000 Saudi Riyals. I am need of this sum of money. So, is it permissible for me to take this money as it is (if I sell my share), knowing that the shares in Riyad Bank were bought without our knowledge all this time?

Response: Take all the money (i.e. sell your share), both your initial investment and the profit and keep your initial investment because that is your property. And give in charity (all) the profit. This is because it is ribaa and Allaah will provide for you from His Excellence and will compensate you with better than it, and will aid you in settling your needs. And whoever fears Allaah, then Allaah will make for him an opening and will provide for you from that which you do not know, and whoever puts his trust in Allaah, then that is enough for him.

And with Allaah lies all success and may Allaah send prayers and salutations upon our Prophet (sal-Allaahu `alayhe wa sallam) and his family and his companions.

The Permanent Committee for Islaamic Research and Fataawa, comprising -
Head: Shaykh 'Abdul 'Azeez ibn Abdullaah ibn Baaz;
Deputy Head: Shaykh 'Abdur-Razzaaq 'Afeefee;
Member: Shaykh 'Abdullaah Ibn Qu'ood
Fataawa al-Lajnah ad-Daa.imah lil-Buhooth al-'Ilmiyyah wal-Iftaa. - Volume 13, Page 506, Fatwa No.5524

and:

Using ribaa funds for good causes

Question: I had shares in a bank which deals with ribaa, and then I sold them and earnt a profit. And now, some time has passed and I do not know what to do with it (the profit). So what do you advise me with? And may Allaah reward you with good.

Response: In the Name of Allaah, and all Praise is for Allaah (alone). The ribaa profit can be spent on good causes, whilst you (are entitled to) keep the initial amount (of the investment). So you must spend this profit in assisting the mujaahidoon and rennovating toilet facilities, and donating to the poor and that which is similar to this.

Shaykh Ibn Baaz
Silsilah Kitaab ad-Da'wah (10), al-Fataawa - Volume 3, Page 200

Allah knows best,

wassalaamu 'alaykum









hasbunAllahu wa ni'mal Wakeel

zaahir.abd
06-11-2007 @ 5:06 PM    Notify Admin about this post
‎‎‎ ‎‎‎ ‎‎‎‎‎ Zaahir bin Hernandez (Newark,N.J.(Amreekaa))
Member
Posts: 187
Joined: Nov 2002
          
AS SALAAMU 'ALAIKUM,

Yah Salaf78,

Do you know anything about a Profit Sharing account? How it works?  I found a definition which said it was Monies given to the employee based on a percentage of his/her annual pay. Whatever the company made in profit was split into their employees based on the above percentage. So will this be like a bonus one gets from the company when they do well during the year?

I thought you might also know about this, so this is why I am asking...

BarakAllaahu feekum

السلام عليكم ورحمةالله
ابوعبدالرحمن زاهر
سبحانك اللهم وبحمدك
أشهد أن لا إله إلا أنت
أستغفرك وأتوب إليك






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