U.S. Labor Department Obtains Court Order Restoring Assets to Former Lexington, Kentucky, Company’s SIMPLE IRA Plan

Archived News Release — Caution: Information may be out of date.

Lexington, Kentucky - The U.S. Department of Labor has obtained a court order requiring the owner of the former Pearce-Phelps Roofing Co., Lexington, Ky., to restore delayed and missing employee contributions and lost earnings to the company’s SIMPLE IRA plan.

“This action is evidence that the department will act when plan officials fail to carry out their duty to protect the assets of plan participants,” said Joseph Menez, director of the regional office in Cincinnati of the department’s Employee Benefits Security Administration (EBSA).

The department’s suit alleged 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 remit contributions deducted from workers’ paychecks to the plan in a timely manner.

Entered in federal district court in Lexington, the order requires McCarty to restore $2,362 in outstanding contributions plus $1,122 in lost earnings to the plan. McCarty is also permanently barred from serving as a fiduciary or service provider 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.

The case resulted from an investigation conducted by the EBSA’s regional office in Cincinnati. 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.

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.

(Chao v. Kyle Grannis McCarty and Pearce-Phelps Roofing)
Civil Action No. 5:06-cv-00278-KSF

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Archived News Release — Caution: Information may be out of date.