Meriden council freezes and sets termination date for South Meriden volunteer service awards after public outcry

Meriden’s City Council on Dec. 15 approved a revised resolution to freeze the South Meriden Volunteer Firefighters Award Program on Dec. 31 and to terminate the plan with distributions set for June 30, 2026, after councilors and volunteers pressed for a short delay to reduce immediate tax burdens.

The action followed public comment from current and former South Meriden volunteer firefighters and their advocates, who said recent notices from the finance department left members facing sudden, taxable lump‑sum payouts that could not be rolled into retirement accounts. "Do not force a payout after December 31," said Stephanie Timmick, secretary of the South Meriden Volunteer Fire Department, citing members' need to consult financial advisers before proceeds are distributed.

City Manager Brian Daniels told the council the award program is a nonqualified plan that had been treated as an award program rather than a pension since its inception in 2012. He said the city had been in consultation with outside counsel and that federal rules limit how long a municipality can delay termination. Daniels described the compromise redlined resolution as a middle ground: freeze the account Dec. 31, place proceeds in a non‑interest bearing account, and complete distributions by June 30, 2026. "We looked into [rollovers]… The answer was no," he said, summarizing restrictions on rolling amounts into IRAs or qualified plans.

Volunteer leaders urged more time to plan. "This creates an immediate financial hardship," said Jim Kenoyer, a longtime chief with the South Meriden Volunteer Fire Department, who requested postponing the vote to allow additional analysis of options including freezing the accounts. The city manager said about 10 people are entitled to distributions and that the funds exceed a half‑million dollars.

Councilors debated potential legal risk if termination were pushed too far beyond the volunteer unit’s dissolution. Finance staff and outside counsel advised that a six‑month hold aligned with the fiscal year and minimized the risk that federal authorities would deem the plan not terminated and require additional contributions. After discussion, councilors moved to amend the resolution to the redline freeze version; the amendment passed on a roll call and the full resolution, as amended, passed unanimously.

The resolution directs city officers to take action necessary to amend the plan’s vesting schedule (crediting participants with seven or more vesting years) and to implement the freeze and termination timeline. Finance staff said they would provide final statements and coordinate required tax forms with participants before distributions are completed in mid‑2026.

Council leaders said they sought to balance legal compliance and financial constraints with the volunteers’ requests for planning time. The council’s action does not resume any additional city contributions after Dec. 31; it only delays distribution of invested funds already in the program.

The council will consider related administrative steps as finance staff finalize accounting and tax withholding procedures for the distributions, and volunteers are expected to receive additional guidance from city staff before payouts are made.