First American Has Excellent 401(k) Plan

Regarding “Executives’ Pensions Are the Deal of a Lifetime,” Jan. 29:

I was disappointed in the article about the discontinuance of pension plans.

Our company, First American Corp., was prominently mentioned, citing the discontinuance of our pension plan.

We replaced our pension plan with an excellent 401(k) matching plan that was not mentioned in the article.

Our 401(k) plan matches up to $2 for every $1 of employee savings, up to 3% of their eligible pay, so long as First American profits meet a certain level. In 2005 alone, First American’s contribution to our employees’ 401(k) plan was more than $60 million.

The real story here is the grievous reserving regulations and reporting requirements imposed by the federal government in recent years. Because the management of a few companies misused their pension reserves and understated their liabilities, the pension rules were changed and it became nearly impossible for companies to comply with these new rules.

The act of a few hurt us all. First American responded by adopting a better 401(k) plan that allows us to channel more money to our employees and less into the useless costs of complying with these rules.

Parker S. Kennedy

Chairman and chief executive

First American Corp.

Santa Ana