We present an analysis of a new XMM-Newton observation of the Seyfert 1 Galaxy NGC 985 . The EPIC spectra present strong residuals to a single power-law model , indicating the presence of ionized absorbing gas and a soft excess . A broad-band fit to the EPIC and RGS spectra shows that the continuum can be well fit with a power-law ( \Gamma \approx 1.57 ) and a blackbody component ( kT \approx 0.09 keV ) . The RGS can be modeled either with two or three absorption components . In the two absorber model the low-ionization one , with \log U \approx . 05 and \log N _ { H } \approx 21.08 accounts for the presence of the Fe M-shell unresolved transition array ( Fe VII-XIII ) , and the high ionization component ( \log U \approx 1.31 and \log N _ { H } \approx 21.99 ) is required by the presence of several Fe L-shell transitions . The data suggest the presence of a third ionized component with higher ionization , so that the Fe L-shell absorption features are produced by two different components ( one producing absorption by Fe XVII-XX , and the other absorption by Fe XX-XXII ) . However , the presence of the third absorbing component can not be detected by means of an isolated absorption line in a significant way , so we consider this detection only as tentative . Interestingly , all ionization components have similar kinematics ( with outflow velocities \sim 280 km s ^ { -1 } ) . In addition , whether two or three absorbers are considered , the components appear to be in pressure balance within 1 \sigma . These results give further support to the idea that warm absorbers in AGN consist of a two or three-phase medium . We note that , while in the model with only two absorbers one of them ( the high ionization component ) lies on an unstable branch of the thermal equilibrium curve , in the model with three absorbers all of the components lie on stable branches of the curve . This gives further plausibility to a multi-phase absorber .