Mayor Charles V. Ryan, Finance Control Board Executive Director Philip Puccia and U. S. Congressman Richard Neal announced in mid-day press conference at City Hall today that the city has reached an agreement with the Internal Revenue Service, which relieves city retirees of the responsibility of paying what could have amounted to thousands of dollars for payments on health insurance premiums.

Statement of Mayor Charles V. Ryan, March 19, 2007

I am pleased to announce today that I along with the Finance Control Board have reached an agreement with the Internal Revenue Service that guarantees city retirees will not be held personally liable for amended tax returns for 2004 and 2005.

The agreement relieves retirees of that liability as it relates specifically to matters of the City’s elective payments of health insurance premiums.

I, along with the Control Board, uncovered the problem several months ago when we learned that the City had not reported elective payments of health insurance premiums since 1993.

Nor did the City withhold federal income tax for those payments.

We also learned that the elective payments may not have been treated as taxable income by retirees before 2006.

Those troubles from city leadership of the past threatened to now impact retirees, conceivably forcing them to personally make up the difference, which in many cases would have equaled thousands of dollars.

Thanks to the hard work of Control Board Chairman Alan Lebovidge, its Executive Director Phil Puccia, and Congressman Richard Neal, the City was able to reach an agreement with the Internal Revenue Service to resolve a fair agreement for what we all understood was potentially an unfair burden for retirees.

The closing agreement underscores the fact that retirees are not at fault and that they are resolved of all issues including taxation, interest and penalties as it relates to the elective payments.