Like a growing number of companies, Countrywide Financial Corp. of Calabasas is phasing out its pension plan to save money, and employees hired since Jan. 1 won't be eligible for lifetime income in retirement.
   But new Countrywide executives still qualify for a special executive pension — one that will pay Chief Executive Angelo Mozilo up to $3 million a year for life.
   First American Financial Corp. of Santa Ana also has one plan for those in the cubicles and one for those in the executive suites. The workers saw their pension plan frozen in 2001. But a special plan for executives will pay Chief Executive Parker S. Kennedy nearly $1 million a year for life if he remains with the company until age 65.
   Major corporations throughout the country are abandoning their pensions, saying the benefits are too costly and less important, with the widespread adoption of individual retirement accounts such as 401(k) plans.
   But many of these same companies are retaining special pension plans for top executives, saying they would lose the top brass to rivals without them.
   "We view this type of program as a standard and necessary component in recruiting and retaining talented top executives," Kelly Dunmore, vice president of employee benefits at First American Financial, said in a statement.
   Others view it as a double standard.
   "These executives earn what an entire neighborhood of typical families make collectively," said Karen Friedman, policy director at the Pension Rights Center, a nonprofit advocacy group. "They don't need this money for retirement. These plans are just outrageous."
   The Times reviewed public filings that spell out pension terms for the 50 largest public companies, ranked by sales, based in California. Twenty-five of these firms reported having a traditional pension plan at some time, but today only nine still promise lifetime retirement benefits to all employees.
   Of the 16 other companies, six never offered pensions to the rank and file, only to executives. Three other firms, including Hewlett-Packard Co., are phasing out pensions but "grandfathered" executives and regular workers alike into existing plans.
   The remaining seven firms retained special lifetime pensions for top executives but eliminated them for the rank and file.
   At Sempra Energy, for example, the board approved management's proposal to convert the pension plan to a "cash-balance" system in 1998.
   Cash-balance plans allow workers to build nest eggs for retirement but do not guarantee a steady monthly income like a traditional pension.
   The company's board, however, retained the special executive pension. Under that plan, Chief Executive Stephen L. Baum should get nearly $2 million a year for life in retirement, according to Sempra's public filings.
   The Sempra board's compensation committee recommended the plan, believing that the special pension would be needed to compete for the best executives, said company spokeswoman Jennifer Andrews.
   "All of our compensation packages are designed to attract and retain top-quality talent," she said. "They are in line with what other Fortune 500 companies are doing."
   In addition to Sempra, Countrywide and First American, other big California companies that implemented this dual standard over the last decade were McKesson Corp., Northrop Grumman Corp., Edison International and Clorox Co.
   McKesson declined to comment. Countrywide said that because of competitive pressure in the industry, it no longer made business sense to offer pensions to new employees, and that the special executive plan was under review.
   Other companies said the executive pensions were needed to be competitive.
   Patrick McGurn, executive vice president of Institutional Shareholder Services, questioned that assertion. Because the plans have not been well disclosed in the past, he said, it's hard to say whether executives choose one company over the next because of the rich pension plan.
   "I think you are creating potential problems with productivity, morale and all sorts of other issues," said McGurn, whose group provides research for major shareholders, such as mutual funds. "If companies are adopting one set of rules for the senior executives and another for the rank and file, that sort of disparate treatment is going to emerge in other areas. It's got to affect how workers view their employer. It clearly sends a message to the worker about what their value is to the company relative to the executive."
   Even so, surveys suggest that two-tiered systems are becoming more common in corporate retirement plans nationwide.
   Just 19% of wage and salaried workers are active participants in an ongoing pension plan, according to the Bureau of Labor Statistics, compared with 35% in 1980.
   But roughly two-thirds of S&P 500 companies offer so-called supplemental executive retirement programs, or SERPs, to the top brass, according to a study by two Harvard professors. The median amount that executives in these plans can expect to reap in retirement is $15 million in today's dollars, the study found.
   These supplemental plans became popular more than a decade ago because of federal limits on the amount of income that can be covered under traditional pensions and still be tax-deductible. Without the supplemental plans, highly compensated employees would see a relatively small portion of their earnings in their monthly pension payments.
   Since then, companies — sometimes with board approval — have increasingly scaled back pensions for the general workforce to cut costs. But the corporate boards that set executive pay have often allowed the special pensions for top managers to go untouched.
   The dual standard is now drawing scrutiny in Congress. Rep. George Miller (D-Martinez) has introduced a bill that would bar companies from funding special executive pensions when they say they don't have enough money to fund workers' pensions. A similar measure is included in broader pension legislation backed by congressional Republicans.
   "This huge disparity between protected compensation and protected pensions that CEOs have versus production workers is really immoral," Miller said. Executives "keep talking about shareholder value. But, what is the value to the corporation of this person who doesn't even work there anymore?"
   Among the largest California companies, most offer 401(k) retirement plans that allow workers to set aside money for retirement on a tax- deferred basis, usually with a company contribution. Unlike pensions, however, these plans do not guarantee income for life.
   Cash-balance plans are similar to 401(k)s, except that companies, and not the employees, make all the contributions and control how the money is invested. To save money, seven major California companies that once offered pensions converted them to cash-balance plans over the last decade.
   Five other companies froze their pensions — barring new employees and, in most cases, capping benefits — but did not convert them to cash-balance plans.
   Beverly Hills-based Hilton Hotels Corp. froze its pension for workers and executives in 1996. Then four years later, it created a special retirement plan for top officers.
   The plan doesn't provide lifetime benefits like a traditional pension, but it will give Chief Executive Stephen Bollenbach more than 700,000 shares in company stock at retirement. Those shares are currently worth nearly $19 million.
   Hilton spokeswoman Judy Notaro declined to discuss the thinking behind the plan.
   "You have the information from the public record," she said. "We're going to leave it at that."
   Six of California's biggest public companies — Mattel Inc., KB Home, Advanced Micro Devices Inc., Ryland Group, Amgen Inc. and Golden West Financial Corp. — offer employees neither a pension nor a cash-balance plan, but give their executives lucrative payouts upon retirement.
   El Segundo-based Mattel, for example, never offered employees a traditional pension program, but in 2005 it significantly boosted its retirement plan for Chief Executive Robert A. Eckert.
   Until last March, Mattel's supplemental retirement plan would pay executives as much as 35% of their average pay. The new plan pays 60% or more. Eckert stands to get about $1.8 million annually for life if he stays with the company at least 10 more years.
   Lisa Marie Bongiovanni, a Mattel spokeswoman, called the special plan "an important retention tool." She added that the company provides a generous 401(k) plan for all workers.
   Los Angeles-based KB Home also does not have a traditional pension for employees, but it makes sure its executives' retirement years are golden. Under its plan, Chief Executive Bruce Karatz is entitled to 100% of his average base pay — which contractually can't drop below $900,000 annually — for 25 years.
   A second supplemental pension will provide Karatz with an additional $800,000 annually for 20 years. The company also pledged lifetime medical and dental benefits, and Karatz will have an office and staff support for as long as he wants it.
   Ryland Group, another home builder, has obligated itself to pay Chief Executive Chad Dreier $2.4 million a year for 15 years after retirement. Dreier earned about $16 million in 2004.
   Ryland's nonexecutive employees do not have a guaranteed pension, but spokeswoman Marya Jones said the company match for the 401(k) plan is generous, with Ryland kicking in $1 for each dollar that employees contribute for up to 6% of their pay.
   "We have produced six consecutive years of top performance," Jones said. "We have to offer competitive benefits to senior executives and employees to retain leadership talent."
   For most companies, the money set aside for the special executive pensions is relatively small compared with their profits. Countrywide, for example, reported $2.2 billion in profit in 2004.
   But when Delta Air Lines Inc., bleeding red ink and jettisoning workers, planned in 2003 to put an additional $20 million into a special retirement plan for top executives, the move caused such an uproar that the company canceled the expenditure.
   Even for companies in good financial health, the costs of these plans are often underestimated, said Paul Hodgson, senior research analyst with the Corporate Library, which campaigns for greater corporate accountability.
   "If you are concerned about wasting stockholders' money, SERPs are high on the list of fairly grand wastes of money," Hodgson said. "There are a significant minority of companies where the SERP is going to have an impact on the company's bottom line long after the executive's retirement."
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(BEGIN TEXT OF INFOBOX)
No pension woes here
Selected California companies that offer pensions or special retirement payments to top executives but scuttled or never offered pensions to other employees.

Name: Advanced Micro Devices
Headquarters: Sunnyvale
Executive retirement benefits: 10-year pension for CEO
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Name: Amgen
Headquarters: Thousand Oaks
Executive retirement benefits: Multimillion-dollar payments for two executives
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Name: Clorox
Headquarters: Oakland
Executive retirement benefits: Lifetime pension
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Name: Countrywide Financial
Headquarters: Calabasas
Executive retirement benefits: Lifetime pension
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Name: Edison International
Headquarters: Rosemead
Executive retirement benefits: Lifetime pension
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Name: First American
Headquarters: Santa Ana
Executive retirement benefits: Lifetime pension
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Name: Golden West Financial
Headquarters: Oakland
Executive retirement benefits: 10-year pension for three executives
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Name: Hilton Hotels
Headquarters: Beverly Hills
Executive retirement benefits: $18-million stock grant for CEO
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Name: KB Home
Headquarters: Los Angeles
Executive retirement benefits: 25-year pension for CEO
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Name: Mattel
Headquarters: El Segundo
Executive retirement benefits: Lifetime pension
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Name: McKesson
Headquarters: San Francisco
Executive retirement benefits: Lifetime pension
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Name: Northrop Grumman
Headquarters: Century City
Executive retirement benefits: Lifetime pension
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Name: Ryland Group
Headquarters: Calabasas
Executive retirement benefits: 15-year pension for CEO
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Name: Sempra Energy
Headquarters: San Diego
Executive retirement benefits: Lifetime pension
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Sources: Company filings, Times research