Standard Life has launched a new Sharia solution, the Standard Life Sharia Universal Strategic Lifestyle Profile, for members of its workplace pension schemes.
It said the lifestyle strategy adheres to the principles of Sharia Law, creating a pension default with clear ethical boundaries and Sharia certification.
It said the strategy avoids alcohol, tobacco, pork products, conventional banking and finance, weapons, and certain types of entertainment.
It takes a defined approach to interest to ensure a Sharia-compliant investment process. Non-compliant income, for example from dividends, is donated to charity.
It said the profile is fully certified to standards set by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and provides growth and at retirement lifestyle options underpinned by investment managers, HSBC Asset Management and Franklin Templeton.
To independently support its approach, Standard Life has also appointed an external Sharia adviser - iConsult Africa.
The Standard Life Sharia Growth Pension Fund aims to increase the value of the pension on a Sharia-compliant basis when the saver is more than 15 years from retirement before switching over time to the Standard Life Sharia At Retirement Pension Fund, which introduces a sukuk fund in the run-up to retirement.
Sukuk is a Sharia-compliant financial certificate, similar to a bond but structured differently in order to be Sharia compliant.
Emma Furlonger, managing director of workplace and retail intermediated (interim), at Standard Life said: “This is a significant milestone in our ongoing development of our lifestyle solutions that meet specific requirements of members.
“Our Sharia-based solution caters to those who want to invest in line with their values and beliefs, without compromising on the prospect of long-term growth. In adhering to Sharia Law, we have sought to strike a balance between appropriate investment risk and good outcomes to help savers secure their income in retirement.”