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Release Date: September 1, 2006
Release Number: 06-1263-ATL (181)
Contact Name: Dan Fuque
Phone Number: 404.562.2078
Lexington, Kentucky - The U.S. Department of Labor has sued the former
owner of the Pearce-Phelps Roofing Co., Lexington, Kentucky, to recover delayed
and missing employee contributions plus any lost earnings for the company’s
SIMPLE IRA employee benefit plan.
“The department will act when plan officials fail to carry out their duty
to protect the assets held to pay benefits of plan participants,” said Joseph
Menez, director of the department’s Cincinnati regional office of the Employee
Benefits Security Administration (EBSA).
The lawsuit alleges that Kyle Grannis McCarty, former company owner and
president, violated the Employee Retirement Income Security Act (ERISA) from
August 2001 through March 2004. He allegedly failed to timely remit to the plan
contributions deducted from workers’ paychecks.
Filed in federal district court in Lexington, the suit seeks an order
requiring McCarty to restore all outstanding contributions plus lost earnings
owed to the plan and permanently bar him from serving as a fiduciary for any
plan covered by ERISA.
While it was in business, Pearce-Phelps was a roofing installation and
service provider. The company’s SIMPLE IRA plan had 29 participants and
$49,668 in contributions as of March 2004.
Employers with similar problems, who are not yet the subject of an
investigation by EBSA, may be eligible to participate in the department’s
Voluntary Fiduciary Correction Program (VFCP). Participation in the VFCP
requires employers to correct violations of the law but allows them to avoid
EBSA enforcement actions and civil penalties as well as any applicable excise
taxes. For more information about the VFCP, see www.dol.gov/ebsa.
The case resulted from an investigation conducted by the EBSA’s Cincinnati
regional office. In fiscal year 2005, EBSA achieved monetary results of $1.7
billion related to the pension, 401(k), health and other benefits for millions
of American workers and their families. Employers and workers can reach the
Cincinnati office at 859.578.4680 or through EBSA’s toll-free number,
1.866.444.EBSA (3272), for help with problems relating to private-sector
retirement and health plans.
(Chao v. Kyle Grannis McCarty and Pearce-Phelps Roofing)
Civil Action No. 5:06-278-KSF
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