Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, December 28, 1994                   TAG: 9412290057
SECTION: BUSINESS                    PAGE: A-7   EDITION: METRO 
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE:                                 LENGTH: Medium

PENNEY OFFERS TO SETTLE SUIT

A federal District Court in Dallas, where Penney has its headquarters, has given preliminary approval to the settlement and will make a final decision after a Jan. 30 hearing.

Twenty-five Western Virginians were among about 700 former and current employees who initially joined the suit when it was filed in May 1993.

On Dec. 24, Penney explained the settlement in 150,000 letters to current and past employees. Until responses come in from that mailing, it won't be known how many Western Virginians could be affected by the decision, said a spokesman with Kinsella Communications Inc., the Washington public-relations company representing the plaintiffs' attorney.

The lawsuit alleged that Penney's pension plan violated the Employee Retirement Income Security Act of 1974 by offsetting estimated Social Security benefits, which were greater than actual benefits, in calculating company pension benefits. The company had made an incorrect assumption about older employees' earnings prior to employment with J.C. Penney.

Penney maintains that its pension formula complied with the law. The contested formula is no longer in effect. The settlement was reached prior to any ruling on the merits of the suit.

Class members will be given the opportunity to have pension benefits recalculated under an agreed-upon formula. They will receive a percentage of the difference, if any, between what they already received and what the settlement formula offers. Recovery could amount to nothing or several thousand dollars.

Further information on the settlement can be obtained by calling (800) 865-3878, or writing J.C. Penney Class Action Administrator, P.O. Box 93260, Washington, D.C. 20090-3260.