Factors affecting the intent to adopt Islamic pension system in Pakistan

Islamic pension schemes provide an alternative to the conventional pension fund system with a Sharia-compliant product; however, their adoption remains limited in Muslim-majority countries. The current study examined the factors influencing employees’ behavioral intention to adopt an Islamic pension fund in Pakistan using the Theory of Planned Behavior. Using survey data collected from 255 participants, conducted an analysis using Structural Equation Modelling to evaluate the direct influences of knowledge, attitudes, religiosity, and subjective norms on the intention to adopt Islamic pension schemes, as well as the mediating role of motivation and the moderating role of perceived benefits. Results showed that all four antecedents produced a significant positive effect on the intention to adopt Islamic pension schemes, with the most significant influence produced by attitude (β = 0.34), followed by religiosity (β = 0.27), knowledge (β = 0.21), and subjective norms (β = 0.19). Further, mediation analysis indicated that motivation partially mediated these relationships, suggesting that cognitive and value-based factors are driving the intention to adopt Islamic pension schemes most directly through an individual’s internal willingness to act. Additionally, the perceived benefits associated with Islamic pension schemes served to strengthen the positive relationship between motivation and intention to adopt. These findings shows that the intention to adopt Islamic pension schemes is based on interaction between an individual’s cognitive, motivational and perceptions of value rather than only religious beliefs, offering behavioral factors influencing the limited adoption of Sharia-compliant pension products in emerging economies.