New Contract Allows Members to Remit Pension for Themselves

Volume CIII, No. 1January, 2003

A new contract introduced by the AFM and approved by the pension fund will allow bandleaders to receive pension contributions – even if they are not incorporated.

For years, members have known that they cannot pay into their own pension accounts unless they formed a corporation. If you were unincorporated and were hired by the mother of a groom to do a wedding, you only had two options. File a single engagement and declare yourself the bandleader, in which case you would pay benefits to your side musicians but not yourself. Or, convince the mother of the groom to be the employer and sign the contract herself, in which case she would be responsible for writing multiple checks, including wages, work dues, pension and health. Most members knew that, unless you were close friends with the employer, this option was unlikely.

Now the new Local Single Engagements (or LS-1) contract allows the employer to designate the bandleader as a payroll agent or designee. The mother of the groom – in the case of our wedding example – would still be the legal employer. However, instead of having to write different checks in different amounts, the employer can write a single check to the bandleader that covers all of the payments. If bandleaders are identified as the designee, they will be empowered to make the separate payments to the union and pension and health funds on behalf of all of the side musicians – and themselves. This means that bandleaders no longer have to form corporations to remit pension on themselves as long as employers agree to sign the form. (This designation does not relieve the employer from any of its obligations to the pension fund.)

The LS-1 contract evolved from the Music Services Agreement, a single engagement contract that Local 802 developed in the past five or six years. Music Services Agreements were used to cover single jobs that didn’t fall into any particular category. They allowed musicians to earn pension and health on clinics, jazz dates and other miscellaneous work. The new LS-1 contract will replace Music Service Agreements. In fact, Music Service Agreements will no longer be accepted by the pension fund effective Jan. 1.

If you want to earn pension as a bandleader, pick up a new LS-1 contract and make sure your employer signs it. Then, collect one check from your employer and fill out the LS-1 report form, listing you and your side musicians’ names, addresses and social security numbers. You will need some assistance filling out the form because certain monies that you receive – like cartage – are not pensionable. The form lets you separate non-pensionable compensation (like cartage) and pensionable compensation (like wages). Then, submit checks to the union as you would normally as a bandleader. Since your name now appears on the report form as a musician, you will receive credit for benefits, something not possible before. The report form (or LS-1-R) is included on the reverse side of the LS-1 contract.

The LS-1 contract can be used in conjunction with almost any kind of live union work, including club dates. It can also be used by itself.

Local 802 requests that all bandleaders utilizing the LS-1 contract meet with a representative from the President’s Department or the Club Date or Organizing departments prior to filing the form.