Q&A: Pension, Provident Fund, Training Fund, and the Prohibition of Interest
Pension, Provident Fund, Training Fund, and the Prohibition of Interest
Question
Hello Rabbi!
I decided to transfer my pension and training funds to a certain fund that I think is preferable. For the first time, I suddenly came across the option of a halakha track. Unfortunately, this track is very far from the form of investment that I want and believe in. Does the Rabbi know this topic? Is the halakha track really the only option that is halakhically permitted? Are there considerations such as major financial loss and the like?
Thank you very much!
Answer
This is a difficult question. Simply speaking, many are lenient, even though the halakhic basis for this is not always clear.
There are leniencies according to which banks or limited companies are not entities that are subject to the prohibition of interest, or even to prohibitions in general. There is discussion over whether such an investment is considered as though the business is owned by you personally (in which case the transgressions are yours as well) or not. In many cases the ownership belongs to non-Jews, or is in partnership with them. In general, it seems to me that one who is lenient has what to rely on.
Discussion on Answer
Also see further expansion in this responsa:
https://mikyab.net/%D7%A9%D7%95%D7%AA/%D7%9B%D7%A9%D7%A8%D7%95%D7%AA-%D7%94%D7%A9%D7%A7%D7%A2%D7%95%D7%AA-%D7%A4%D7%99%D7%A0%D7%A0%D7%A1%D7%99%D7%95%D7%AA%E2%80%8E
Thank you very much, Rabbi!
Oren, thank you very much to you as well; you helped me a lot! I invest only in indexes, and it turns out that this is actually perfectly fine… As for managing the portfolio personally, financially too it is very worthwhile. I’m thinking about it…
There is an appendix on kosher investments from the Badatz that gives detailed guidelines on what one needs to be careful about. Here is a link to the appendix:
https://drive.google.com/open?id=0BwJAdMjYRm7IeUJCVUEzRU01cWM
You can set up a self-managed provident fund for yourself (and also a training fund, and maybe a pension fund too), in which you manage your money according to your best judgment while observing the restrictions of Jewish law as detailed in the appendix. For example, it is possible to invest in index certificates according to the appendix, and this is a very common form of investment nowadays. I personally manage my investments this way. If there is any particular investment instrument about which you have doubts, you can ask a rabbi specifically about it.