9111 Duke Blvd.

Mason, OH 45040-9853

1-800-337-2363

Planning for Your RetirementYour Retirement Benefit Guide

3

Table of Contents

Moving Toward a New Lifestyle:

A Reward for Your Service 4

Coordinating the Plans:

Your Personal Contact 4

Designing Your Plans:

Preparing for Retirement 5

Building the Framework:

6 Steps You Need to Take 5-6

Nailing Down the Specifics:

The Impact of Re-employment

on Retirement Benefits 7

Envisioning the Outcome:

Savings Plan/Pension Plan 8

Envisioning the Outcome:

Retiree Medical 9

Glossary 10-14

4

Rebecca O’CullFACS Group

Retirement Coordinator

Moving Toward a New Lifestyle:

A Reward for Your Service

We appreciate your hard work and

dedication and are pleased to provide you

with a variety of retirement benefits.

Coordinating the Plans: Your Personal Contact

If you are planning to retire within the

next 90 days, there is a great deal of ground-

work that must be completed. To help you

coordinate this very important event,

Rebecca O’Cull, a Federated HR Services

representative, will serve as your personal

contact. Rebecca began her career with

Federated HR Services in 1994. As your

personal contact, Rebecca will direct the

appropriate benefit plan administrators to

prepare your retirement information so that

all of your benefits commence on sched-

ule.

To contact Rebecca O’Cull to

notify her about your upcoming

retirement:

- Dial 1-888-337-2363

- Advise the representative that you are

a future retiree and that you would

like to speak with Rebecca O’Cull.

Our most valuable assets are

dedicated associates like you. You have

provided outstanding service and helped

make Federated Department Stores, Inc.,

together with its subsidiaries

(“Federated” or the “Company”)

successful through changing times.

5

Make sure Social Security has an

accurate record of your earnings

history and request an estimate

of your future benefits.

Call Social Security at 1-800-772-1213

and ask for a “Request for Earnings and

Benefit Estimate Statement.” Or, visit the

Social Security Statement website at

www.ssa.gov/mystatement/. Upon

receiving this form (generally within 6

weeks), complete it and return it to the

Social Security Administration office to

receive a statement of your past earnings,

a summary of what you have paid in

Social Security taxes, an estimate of your

future benefits and an explanation of how

to apply for Social Security benefits.

Designing Your Plans: Preparing for Retirement

There isn’t a working person who, at some point, hasn’t dreamed of retire-

ment. If you plan to retire within the next 90 days and believe you may be eligible to

receive retirement benefits from Federated, this guide is the blueprint for making the

dream a reality.

To simplify retirement preparations, this booklet guides you through the steps,

forms and requirements necessary to receive retirement benefits. A review of the

Understanding the Structure: “Retiree Benefits at a Glance” section that follows this

book should help you determine the benefits you may be eligible to receive upon retire-

ment and the steps you must take to receive them. More detailed information about the

Profit Sharing 401(k) Investment and Cash Account Pension plans is available sepa-

rately by calling 1-800-337-2363.

The terms and conditions of the benefits discussed in this guide are deter-

mined solely by the Summary Plan Descriptions or plan documents of the retiree ben-

efit programs offered at Federated Department Stores, Inc. Federated reserves the

right to amend or terminate any of these benefits at any time without regard to prior

satisfaction of the eligibility conditions. Nothing contained in this guide should be

construed as creating a contract of employment with Federated.

Building the Framework:

6 Steps You Need to TakeBefore you actually retire, you should take several important steps to determine

what your living expenses and income needs will be upon retirement.

Examine your monthly and

annual financial obligations to

determine your financial needs.

These obligations may include, but are

not limited to:

• mortgage/rent payments

• insurance premiums

• credit/debit card payments

• loan payments such as car or

home equity loans

• grocery and utility expenses

STEP 1: STEP 2:

6

Building the Framework:

6 Steps You Need to Take

Call Rebecca O’Cull at

1-888-337-2363 to request your

comprehensive retirement

packet.

When you call, have the following

information available:

• estimated date of retirement

• marital status and, if married,

your spouse’s date of birth

• previous termination/

retirement and rehire dates, if

applicable

If you are eligible, you will receive

information about your Cash Account

Pension Plan and Retiree Medical

options approximately 4 weeks

following notification of your

upcoming retirement.

Check your Profit Sharing

401(k) Investment Plan balances

by calling Federated HR Services

at 1-800-337-2363 or by access-

ing the 401(k) and Pension

website through In-Site, our em-

ployee self-service website.

You can receive up-to-date informa-

tion about your retirement savings

account balances, including your

company contributions and earnings.

Only you can access your account by

entering your Social Security number

and personal identification number.

Take an inventory of any other

sources of income such as:

Personal Investments:

• Individual Retirement Accounts

(IRA)

• Personal savings

• Certificates of Deposit (CD)

• Stock portfolios

Other sources:

• Income from your spouse’s

employment

Locate your birth certificate as

proof of your date of birth. In

some situations, your spouse’s

birth certificate may be necessary

also.

You will need a certified copy of your

birth certificate when applying for

Social Security benefits. Federated

Benefits will also require a copy of

your birth certificate, and in some situ-

ations your spouse’s birth certificate,

with your signed election forms.

STEP 3:

STEP 5:

STEP 6:

STEP 4:

Using a touch-tone phone or by accessing

the 401(k) and Pension website through In-

Site, our employee self-service website, you

can:

• Obtain account information

• Change your rate of savings

�• Verify or change your investment

elections for future savings

�• Verify or request a fund balance

transfer

�• Listen to historical fund

performance or general plan

information

7

Nailing Down the Specifics: The Impact of

Re-employment on Retirement Benefits

Savings Plan and/or Pension Plan

If you have not received your vested

benefits from the qualified retirement plans

(or not begun to receive monthly annuity

payments) before you are re-employed by

Federated, any pending distribution could

be stopped.

When processing a termination pay-

ment from the Savings Plan or Pension

Plan, there is a review to make sure your

status is inactive. If not, your payment pro-

cess is halted. The distribution of any

vested benefits will not proceed until your

record is inactivated and new termination

paperwork is filed.

If, however, a lump-sum payment has

been made or monthly annuity payments

have already started before you are re-

hired, no action will be taken to suspend

your payment(s).

Re-employment includes on-call,

contingent, seasonal, special-sale, part-

time and all other regular status employ-

ment at any Federated Division.

Retiree Medical Plan Participants

If you are currently enrolled in re-

tiree medical coverage, and are re-hired

by the company into a benefits eligible

schedule, you must join the company

sponsored health plan for active associ-

ates immediately upon re-hire. Regard-

less of your election to participate or not,

retiree health plan participation will be dis-

continued immediately upon your re-hire

into a benefits eligible schedule. Upon

subsequent termination, you must elect re-

instatement of your retiree medical plan

in order to have medical coverage con-

tinue.

Important Note

Regarding the Retiree

Medical Plan

In the event you are rehired

more than 60 days after

your retirement date, any

“grandfathered provisions”

that may have applied dur-

ing previous employment do

not apply, i.e., benefits,

scheduling and paid time off.

8

Cash Account Pension Plan

If you are vested in a benefit the table below shows examples of estimated

monthly benefits under the Cash Account Pension Plan for employees retiring in

2000 at age 62 and 67. The benefit amounts shown are estimates, not guarantees,

and are determined as of a Commencement Date of September 1, 2000.

Monthly Pension Plan Benefits for an Employee Retiring in 2000 with

Payments Commencing on September 1, 2000

The table below shows examples of estimated monthly benefits under

the Profit Sharing 401(k) Investment Plan for employees retiring in 2000 at age

62 and 67. The benefit amounts shown are estimates, not guarantees, and are

determined as of a Commencement Date of September 1, 2000.

Profit Sharing 401(k) Investment Plan

Monthly Benefits for an Employee Retiring in 2000 with Payments

Commencing on September 1, 2000

Envisioning the Outcome:

Savings Plan/Pension Plan

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9

Envisioning the Outcome:

Retiree Medical

If you are an eligible retiree you may be able to elect the continuation of your

medical coverage after retirement. Your contribution towards the cost of retiree

health care coverage is determined by the coverage option you choose, your age,

your years of service at retirement, and whether you select individual or family cov-

erage. The amount of your contribution may be changed from time to time. The

Company contributes $50 per year of credited service toward the annual cost of

medical coverage for retirees under age 65. The Company contributes $25 per year

of credited service toward the annual cost of medical coverage for retirees age 65

and older. The contribution you make for coverage only covers part of the total cost

for coverage. The maximum Company contribution will not exceed the total annual

cost for “retiree only” coverage. The Company does not contribute toward the cost

of dependent coverage.

For example:

Mr. Bennett is 57 years old and has worked for Federated Department Stores

for 20 years. Mr. Bennett is currently enrolled in the Oxford Freedom POS

health care plan. The plan cost is $272.82 per month. Mr. Bennett has a Com-

pany contribution of $1,000 per year ($83.33 per month). Mr Bennett’s monthly

cost of his health care plan is $189.49.

Mrs. Harding is 69 years old and has worked for Federated Department Stores for

20 years. She is currently enrolled in the Federated Carve-Out Plan. The cost of

this plan is $100.00 per month. Mrs. Harding’s Company contribution is $500 per

year ($41.67 per month). Mrs. Harding’s monthly cost is $58.33.

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10

Glossary

401(k) Savings Plan The Profit Sharing 401(k) Investment Plan (the

401(k) Plan) amends and replaces, effective as of

April 1, 1997, all of the prior tax-qualified savings

plans which were maintained by the Company for

Company employees and in which you may have

participated prior to April 1, 1997. Such prior

plans include the Federated Department Stores,

Inc. Retirement Income and Thrift Incentive Plan,

the R.H. Macy & Co., Inc. Savings Plan, the

Broadway Stores Inc. 401(k) Savings and Invest

ment Plan, and the Federated Savings Plan for

Employees of Lazarus PA, Inc. The monies of all

such prior plans have been merged to form the

401(k) Plan.

Account Balance The amount of money that has accumulated in

your account under the Retirement Program.

Annuity A form of benefit in which payments are made

at regular intervals. The most common form of

annuity is one that pays monthly benefits for

life.

Annuity Commencement The date you start to collect retirement ben-

Date efits.

Annuity with a Term An annuity in which you are guaranteed to

Certain (i.e., 10 Year receive annuity payments for a certain number

Certain and Life) of years (or other period) for which payments

are guaranteed.

Benefit The type of payment you will be entitled to

upon retirement from your plan. (As noted,

this booklet discusses only Retirement benefits.)

.

The following terms may be helpful to you in understanding this

booklet. We note that the definitions given are applicable only to the mate-

rial we have discussed and may mean something different if used outside an

explanation of retirement benefits.

11

Cash Account Pension The Cash Account Pension Plan (the Pension Plan)

Plan amends and replaces, effective as of January 1,

1997, all of the prior tax-qualified pension plans

which were maintained by the Company for

Company employees and in which you may have

participated prior to 1997. Such prior plans were

the Federated Department Stores, Inc. Pension

Plan, the R.H. Macy & Co., Inc. Pension Plan, the

Allied Stores Corporation Retirement Benefit Plan,

the Pension Plan for Employees of Broadway

Stores Inc., the Supplemental Pension Plan for

Hourly Employees of The Emporium, and the

Amended and Restated Joseph Horne Co., Inc.

Pension Plan.

Consent Agreement.

Company Contribution The amount that Federated puts into the Profit

Sharing 401(k) Investment Plan during a year.

Designated Beneficiary Generally, the person you name to collect

benefits payable on your behalf after your

death.

Distribution The payment of your benefits to you (or your

beneficiary) from your plan. Distribution can

occur at once, in a lump sum, or over a period

of time.

Earnings History A history of your annual income earned while an

employee of the Company.

Election Choice.

Exempt Associate An employee who is excluded from the minimum

wage and overtime provisions of the Fair Labor

Standards Act (FLSA).

Fair Labor Standards A federal law that sets forth classification of

Act (FLSA) employees.

Federated Traditional The Traditional Program is available to eligible

Medical Program retirees and covered dependents under age 65 who

are not receiving Medicare coverage as a result of

a disability. This program is an indemnity program

that offers comprehensive medical coverage. The

Traditional coverage option allows you to use any

qualified physician or hospital for your medical

care and pays a percentage of the expenses for

eligible medical services or procedures.

12

Investment Election When you join the 401(k) Plan, you can choose

how your savings (pre-tax or after-tax) and the

Company contributions made on your behalf are

invested among the investment funds offered by

the Plan.

Joint and Survivor An annuity that pays benefits over the lifetime

Annuity of the person you name as your beneficiary

(such as your spouse).

Lump-Sum Payment A form of benefit payment in which you

receive all of your benefit at once.

Managed Care An approach to health care coverage that aims to

improve quality and contain costs by specifying

certain physicians and hospitals for its members to

use. Some managed care organizations require that

you select a primary care physician who is respon-

sible for coordinating all of your medical care.

Medicare A Federal Insurance program available at the

beginning of the month in which you reach 65.

Medicare also may be available earlier than age 65

if you are disabled.

Federated Cash Account Upon retirement at or after age 55, a participant

Pension Plan Guaranty who while employed by the company, both reach-

ed age 55 and completed 10 or more years of vest-

ing service by December 31, 2001, is eligible for

the pension guaranty. Formerly, to be entitled to the

guaranty a participant eligible for the guaranty had

to retire before 2002. This is no longer necessary.

Now, the guaranty will continue to apply whenever

such eligible participant retires.

Under the guaranty, annuity benefits, other than

the single life annuity, cannot be less than what the

annuity benefit would have been under the pension

plan the participant belonged to in 1996, had it con-

tinued in effect. The guaranty benefit is not

payable in a lump sum.

Fund Balance Transfer You can choose how your savings (pre-tax or after-

tax) and the Company contributions made on your

behalf are invested among the investment funds

offered by the Plan in 1% multiples (with a maxi -

mum of 50% in the Federated Stock Fund).

13

Pension The benefit paid to a person from a retirement

plan.

Personal Identification A personal four-digit number used by an em-

Number (PIN) ployee to access their Retirement Program Ac-

counts.

Qualified Joint and A joint and survivor annuity that meets certain

Survivor Annuity (QJSA) rules. Generally, a QJSA will pay a certain

amount while both you and your spouse are

alive and a lesser amount to your spouse if he

or she is alive at your death.

Reinstatement If you are reemployed within six years of your

original termination of employment, and you

repay to the 401(k) Plan the amount of money

you previously received, any non-vested money

will generally be, “reinstated,” to your account.

Retiree In general an associate who ends service

from the company having attained at least 55

years of age and at least 15 years of service.

Medicare Carve-Out The Carve-Out Program provides coverage to a

Program retiree and his or her covered dependents age 65

and older (or under age 65 and enrolled in Medi-

care due to a disability) and enrolled in Medicare

Parts A and B. Medicare is the primary payer of

benefits when a retiree is enrolled in the Medicare

Carve-Out Program.

Non-Exempt Associate An employee who must be paid at least minimum

wage for all hours worked, and overtime pay at the

rate of time and one-half their regular rate for all

hours worked over 40 per week.

Normal Retirement The age at which you are entitled to retire

Age under your plan with a full benefit.

14

Termination of The time at which you quit working for your

Employment company.

Vested Benefit A nonforteitable benefit. If you are vested in a

benefit, you have a right to that benefit even if you

quit working for your employer.

Waive Give up or relinquish. If you and your spouse

“waive” a QJSA, then you have decided not to

receive your benefits in that form.

Social Security Public programs established in 1935 under the

Social Security Act to provide income and services

to individuals in the event of retirement, sickness,

disability, death, or unemployment.

Spouse Your husband or wife.

Spousal Consent The agreement of your husband or wife to change

the benefit that otherwise would be paid to you

automatically from your plan. Often, this is an

agreement not to have a survivor benefit payable

to your surviving spouse upon your death.

Survivor A person who lives longer than another person.

Single-life Annuity An annuity that pays benefits over your lifetime.

Glossary

9111 Duke Blvd.

Mason, OH 45040-9853

1-800-337-2363