THE INFAQ THEORY OF ISLAMIC PENSION
This paper applies an Islamic economic perspective to a major conundrum besetting the Islamic world, namely, how to provide financial support to expanding ageing Muslim populations. The paper employs a qualitative method involving descriptive and analytical methods whereby primary and secondary data are analyzed to inductively form a formula for an Islamic pension scheme. The results of this study suggest that despite the benefits and worldwide application of pension schemes, proponents of Islamic finance remain ill-prepared and slow to devise prototypes of workable Islamic pension models designed to address the needs of ageing Muslim populations. The vast majority of existing pension schemes fail to comply with the principles and values of Islamic law and ethics. As a generality, Muslim populations would prefer to remain without pension provision rather than endorse a religiously unlawful policy. The paper proposes that infaq as a key institution of Islamic moral economy, provides an ideal foundation for the development of an Islamic pension model that satisfies both legal and ethical Islamic stipulations. Keywords: Islamic pension, Islamic welfare, Muslim elderly, Muslim employees’ pensions, infaq and Islamic moral economy.
JEL Classification Codes: G32, F65, L66, L25, M41.
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