Now: Pensions has confirmed that it is now providing a Shariah fund option for Uber’s Muslim-majority drivers.
Uber selected Now: Pensions as its workplace pension provider for its self-employed drivers in September 2021 without initially offering a Shariah-compliant fund.
The partnership was to offer a pension plan to qualified drivers in the UK which they estimated was around 70,000.
Last year Uber attracted media attention for offering a pension plan without an option that adhered to Shariah law, given the fact that a substantial majority of Uber’s drivers, around 75 per cent, practice Islam.
In April 2022 Uber was threatened with legal action for failing to provide a Shariah-compliant pension plan for its Muslim-majority staff. The App Drivers & Couriers Union (ADCU) accused Uber of failing to offer a pension plan that adheres to Islamic principles, alleging that the company’s inability to do so violates UK equality legislation.
But according to the Pension Regulator, the lack of a faith-based option is not against auto-enrolment rules.
The Pension Regulator says: “An employer must use a pension scheme for automatic enrolment that meets certain criteria set out in law, for example, it must be tax registered, meet minimum contribution requirement, for defined contribution pension schemes.
“This criteria does not include that the scheme must provide a faith option. We expect employers to consider the particular needs of all their workforce when choosing a scheme for automatic enrolment.”
A Now: Pensions spokesperson says: “We have provided Uber members with access to a Shariah fund option since October 2022.
“Uber’s partnership with Now: Pensions makes it the first business of its kind, in the private hire vehicle and ride-hailing industry, to provide a pension for flexible workers in the gig economy. We are proud to be Uber’s workplace pension provider and enable more gig economy workers to actively save towards their retirement.”
Hymans Robertson head of DC investment Callum Stewart says: “It seems appropriate that the range of choices should also reflect diversity in the population, by faith and/or otherwise so more individuals can tailor their savings to reflect their needs.
“We think this challenge will grow in focus, as knowledge and engagement in pension savings improve through guidance and technology. For example, with a better understanding of how their pension savings are invested, savers might demand more choices to reflect their needs and values.
“Many schemes already offer a Shariah-compliant equity fund but could go further to cater for different risk tolerances. For example, it may be appropriate to offer lower risk choices given many already investing in Shariah-compliant equity funds may be approaching retirement.”