EOHCB: Why Employers Must Take The HBSI Pension Fund Seriously

The Hairdressing, Cosmetology, Beauty, and Skincare Industry (HBSI) Pension Fund is not just a legal requirement—it’s a business obligation with serious consequences if ignored. Employers are at the centre of making sure their employees’ futures are protected, and compliance with the Pension Funds Act is non-negotiable.

Your Legal Responsibilities as an Employer

By law, every employee between the ages of 15 and 60 in this industry must be part of the fund. Employers are required to:

1. Deduct the employee’s contribution (6% of salary, 6.5% in KwaZulu-Natal).

2. Match this contribution with an equal employer payment.

3. Pay both contributions into the fund within 7 days of deducting from salaries.

Failure to comply with Section 13A of the Pension Funds Act is a criminal offense. Company directors and owners can face personal liability, and the Financial Sector Conduct Authority (FSCA) publicly lists defaulting employers.

Why Compliance Matters for Employers

• Legal protection: Paying contributions on time keeps your business safe from fines, prosecution, and reputational damage.

• Employee trust: Staff rely on these savings for their retirement, as well as benefits like funeral cover, disability, and critical illness payouts. When contributions are not paid, employees lose these protections—and employers face a massive financial backlash.

• Industry stability: Over R7 billion is currently owed in unpaid pension contributions across South Africa. Staying compliant helps prevent the industry from falling into the same trap.

The Risks of Non-Payment

• Directors may be held personally liable for arrears.

• Employees may lose out on essential benefits like funeral cover, maternity protection, or disability income.

• Your business risks being named and shamed by the FSCA, damaging its credibility.

• Legal proceedings and financial penalties can threaten the sustainability of your business.

Good Standing = Business Advantage

Remaining in good standing with the HBSI Pension Fund also ensures your employees can access valuable benefits, such as:

• Enhanced maternity benefits (contribution holiday of up to 4 months while the fund maintains insurance cover).

• Full death, disability, and critical illness coverage.

• Security of retirement savings that reflects well on you as an employer who cares.

Best Practices for Employers

To stay compliant and protect your business:

1. Deduct and pay contributions by the 7th of the following month.

2. Keep accurate payment records.

3. Provide transparent communication to employees about their fund status.

4. Monitor compliance regularly to avoid arrears.

Section 14 Transfers

• If an employee’s funds be transferred from any other fund to the HBSI Pension Fund this process is called a Section 14 Transfer.

• Should the employee lodge a claim while the transfer is still in progress, the employee would claim from both the “old” fund as well as the HBSI Pension Fund if they already contributed towards the fund.

• No benefits or accumulated funds would be lost during the transfer process.

The HBSI Pension Fund is not optional—it is a legal obligation and a business responsibility. By paying contributions correctly and on time, you protect your employees, safeguard your reputation, and ensure long-term stability for both your staff and your business.

For more information or assistance:

Phone: 086 111 4662 / 072 858 9786

Email: hbsipension@prevue.co.za

For any further information or enquiries please contact the EOHCB representative in your area by clicking HERE.

EOHCB Contact Details

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