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                                                                   10.(iv)(D)(5)

                      MONTGOMERY WARD & CO., INCORPORATED
                                Fifth Amendment
                                    to the
                      Montgomery Ward & Co., Incorporated
                           Retirement Security Plan

     WHEREAS, Montgomery Ward & Co., Incorporated, an Illinois corporation
("Ward"), maintains the Montgomery Ward & Co., Incorporated Retirement Security
Plan ("Plan"); and

     WHEREAS, pursuant to Section 17.1 Power to Amend, the Benefit Plans
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Committee of Ward ("Committee") has reserved the power to amend the Plan; and

     WHEREAS, the Committee desires to amend the Plan.

     NOW, THEREFORE, the Plan is amended effective September 17, 1997 in the
following manner:

     1.   ARTICLE II, Definitions, is hereby amended by adding the following new
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definitions:

          "2.5A  'Average Weekly Hours' means the most recent twelve (12)
     months actual hours paid divided by fifty-two (52) weeks, or, if the
     Eligible Location Shutdown Participant has less than one (1) year of
     Continuous Service, the Eligible Location Shutdown Participant's actual
     hours paid since the start of the period of Continuous Service divided by
     the number of weeks paid.

          2.13A  'Daily Pay Rate' means the Weekly Pay Rate divided by five (5).

          2.18A  'Eligible Location Shutdown Participant' means each Associate
     (other than each part-time or temporary Associate who is neither eligible
     to participate in the Plan nor has two (2) years of Continuous Service) who
     (a) was not employed by Signature Financial/Marketing, Inc.; (b) was not
     covered by a collective bargaining agreement; (c) was not bonus eligible
     (not a grade fifteen (15) or higher); (d) terminated employment with the
     Company on or after September 17, 1997 as a result of a closure of a
     facility announced on or after September 1, 1997, as determined by the
     Committee and (e) entered into any release and waiver agreement as
     requested by the Company. Notwithstanding anything herein to the contrary,
     to be an Eligible Location Shutdown Participant an Associate must also
     remain employed with the Company until the date of the Associate's
     permanent lay-off by the Company because of the closure of the facility.

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          2.52A  'Weekly Pay Rate' means (a) for management and administrative
     supervisory Eligible Location Shutdown Participants, the Eligible Location
     Shutdown Participant's annual base salary on the date of the announcement
     of the closure of the applicable facility (or for Eligible Location
     Shutdown Participants who are on an authorized leave of absence as approved
     by the Committee on the date of the announcement of the closure of the
     applicable facility, the Eligible Location Shutdown Participant's annual
     base salary on the date immediately preceding the first day of such leave
     of absence) divided by fifty-two (52) and (b) for wage Eligible Location
     Shutdown Participants, the Eligible Location Shutdown Participant's hourly
     base rate of pay/draw rate on the date of the announcement of the closure
     of the applicable facility (or for Eligible Location Shutdown Participants
     who are on an authorized leave of absence as approved by the Committee on
     the date of the announcement of the closure of the applicable facility, the
     Eligible Location Shutdown Participant's hourly base rate of pay/draw rate
     on the date immediately preceding the first day of such leave of absence)
     multiplied by Average Weekly Hours."

     2.   The text of Section 2.51 is hereby deleted in its entirety and the
following is inserted in lieu thereof:

          "'Vest', 'Vested' or 'Vesting' means the acquisition by a Participant,
     an Eligible Location Shutdown Participant or the Participant's or the
     Eligible Location Shutdown Participant's Beneficiary of a nonforfeitable
     right to a Retirement Benefit, except in the event of the Participant's
     death prior to the time prescribed for payment of such Retirement Benefit.
     For purposes of the Plan, Vesting occurs after five (5) Years of Service
     (three (3) Years of Service for benefits accrued pursuant to Section 7A.2
     Annual Cash Balance Contribution and any interest accrued on such Cash
     --------------------------------                                      
     Balance Contribution under Section 7A.4 Interest Credits, and immediately
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     for benefits accrued pursuant to Section 7A.3 Location Shutdown
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     Contribution and any interest accrued on such Location Shutdown
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     Contribution under Section 7A.4 Interest Credits) with the fifth year
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     (third year for benefits accrued pursuant to Section 7A.2 Annual Cash
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     Balance Contribution) being the completion of five (5) months of service or
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     upon Normal Retirement Date pursuant to the provisions hereof, whichever
     occurs first.  In determining whether a Participant is Vested, the Years of
     Service prior to any Break in Service shall be disregarded if he was not
     then Vested and the number of consecutive years in which he incurred a
     Break in Service equals or exceeds the greater of five (5) or the aggregate
     number of the Participant's Years of Service prior to such Break in Service
     (excluding any Years of Service prior to January 1, 1976 which were
     disregarded under the break in service rules then in effect under the
     Retirement Security Plan, and excluding any Years of Service which are
     disregarded under the Break in Service rules of the Plan, the Prior Plans,
     the Jefferson Stores Plan or the Lechmere Plan)."

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     3.   The Plan is hereby amended by deleting Section 7A.1 in its entirety
and inserting the following in lieu thereof:

          "7A.1  In General.  A notional account (hereinafter referred to as the
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     'Cash Balance Account') shall be established and maintained for each
     Associate who is a Participant in the Plan on or after July 1, 1997.  Such
     Participant's Cash Balance Account shall be credited with an Annual Cash
     Balance Contribution in accordance with Section 7A.2 and Interest Credits
     in accordance with Section 7A.4. On or after July 1, 1997, a Cash Balance
     Account shall also be established and maintained for each Eligible Location
     Shutdown Participant who is not otherwise a Participant in the Plan. An
     Eligible Location Shutdown Participant's Cash Balance Account may be
     credited with a one-time Location Shutdown Contribution in accordance with
     Section 7A.3 and Interest Credits in accordance with Section 7A.4."

     4.   The Plan is hereby amended by renumbering Sections 7A.3 and 7A.4 as
Sections 7A.4 and 7A.5 respectively, and by adding the following as the text of
Section 7A.3:

          "Location Shutdown Contribution.
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          (a)  Each Eligible Location Shutdown Participant shall be credited
     with a one-time Location Shutdown Contribution in an amount equal to the
     amount described in Subsection (b) below, but in no event less than the
     amount described in Subsection (c) below. The one-time Location Shutdown
     Contribution shall be credited to the Cash Balance Account of each Eligible
     Location Shutdown Participant in the month in which the individual becomes
     an Eligible Location Shutdown Participant. Partial years of Continuous
     Service will not be counted for purposes of this Location Shutdown
     Contribution and Continuous Service only through the date of the closure of
     the Eligible Location Shutdown Participant's facility which closure is
     announced on or after September 1, 1997, as determined by the Committee
     shall be counted for purposes of Subsection (b).

          (b)  The Cash Balance Account of each Eligible Location Shutdown
     Participant shall be credited with an amount equal to the Eligible Location
     Shutdown Participant's Daily Pay Rate multiplied by the number of years of
     Continuous Service multiplied by the number set forth in the following
     chart:

          Type of Associate        Applicable Number
          -----------------        -----------------

          Management and
          Administrative/Supervisory         5.0
          Wage                               2.5

          (c)  Notwithstanding anything herein to the contrary, in no event
     shall any Eligible Location Shutdown Participant be credited with a
     Location Shutdown Contribution which is less than the Eligible Location
     Shutdown Participant's Daily Pay Rate multiplied by ten (10)."

     5.   In all other respects, the Plan, as amended, shall continue in full
force and effect.

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<PAGE>
 
                      MONTGOMERY WARD & CO., INCORPORATED

                       By:    /s/ Robert A. Kasenter
                             --------------------------------------------
                       Name:  Robert A. Kasenter
                       Title: Executive Vice President - Human Resources
 
                      ATTEST:

                       By:    /s/ Philip D. Delk
                             --------------------------------------------
                       Name:  Philip D. Delk
                       Title: Vice President, Deputy General Counsel and
                               Assistant Secretary

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