PENNEY’S SETTLES PENSION SUIT
NEW YORK — J.C. Penney Co. said Tuesday it settled a class action suit brought by two former employees regarding their pension benefits.
The lawsuit alleged that Penney violated the Employee Retirement Income Security Act of 1974 when it offset estimated social security benefits that were greater than actual social security benefits in calculating pension benefits.
In a joint statement, Penney and the class action group said the method of offsetting estimated social security benefits was a common practice that “complied with the law.”
Under the settlement, which has received the preliminary approval of Dallas Federal Judge Joe Kandall, class members will have their pension benefits recalculated under an “agreed-upon formula.” aPenney said total payments to class members will “not exceed $80 million.” The settlement will be paid by the “well-funded” J.C. Penney Pension Plan and financial impact on the company will be “insignificant,” Penney said.
— Fairchild News Service