<PAGE>
 
                                                                   EXHIBIT 10.18

                             AMENDMENT NO. 1996-2
                                TO SUPPLEMENTAL
                           EXECUTIVE RETIREMENT PLAN

          This Amendment No. 1996-2 is made to the Great Western Supplemental
Executive Retirement Plan (as amended) (the "Plan").  Capitalized terms used
but not defined herein shall have the meanings ascribed to them in the Plan.

          WHEREAS, Great Western Financial Corporation (the "Company") has
determined that it is in its best interest and that of its stockholders to amend
the Plan as set forth herein;

          NOW, THEREFORE, the Plan is amended as follows:

          1.   Section 1.3 of the Plan is amended by deleting the definition of
"Change in Control" and inserting in lieu thereof the following:

               A "Change in Control" shall be deemed to have occurred if the
          event set forth in any one of the following paragraphs shall have
          occurred:

          a.   Any Person is or becomes the Beneficial Owner (as defined in
               Rule 13d-3 under the Exchange Act), directly or indirectly, of
               securities of the Company (not including in the securities
               beneficially owned by such Person any securities acquired
               directly from the Company or its affiliates) representing 25% or
               more of either the then outstanding shares of common stock of the
               Company or the combined voting power of the Company's then
               outstanding securities, excluding any Person who becomes such a
               beneficial owner in connection with a transac- 
<PAGE>
 
               tion described in clause (i) of paragraph c. below; or

          b.   The following individuals cease for any reason to constitute a
               majority of the number of directors then serving: individuals
               who, on December 10, 1996, constitute the Board of Directors and
               any new director (other than a director whose initial assumption
               of office is in connection with an actual or threatened election
               contest, including but not limited to a consent solicitation,
               relating to the election of directors of the Company) whose
               appointment or election by the Board of Directors or nomination
               for election by the Company's stockholders was approved by a vote
               of at least two-thirds (2/3) of the directors then still in
               office who either were directors on December 10, 1996, or whose
               appointment, election or nomination for election was previously
               so approved; or

          c.   There is consummated a merger or consolidation of the Company
               with any other corporation, other than (i) a merger or
               consolidation which would result in the voting securities of the
               Company outstanding immediately prior to such merger or
               consolidation continuing to represent (either by remaining
               outstanding or by being converted into voting securities of the
               surviving entity or any parent thereof) at least 60% of the
               combined voting power of the voting securities of the Company or
               such surviving entity or any parent thereof outstanding
               immediately after such merg- 

                                       2
<PAGE>
 
               er or consolidation, or (ii) a merger or consolidation effected
               to implement a recapitalization of the Company (or similar
               transaction) in which no Person is or becomes the beneficial
               owner, directly or indirectly, of securities of the Company (not
               including in the securities beneficially owned by such Person any
               securities acquired directly from the Company or its
               subsidiaries) representing 25% or more of either the then
               outstanding shares of common stock of the Company or the combined
               voting power of the Company's then outstanding securities; or

          d.   The stockholders of the Company approve a plan of complete
               liquidation or dissolution of the Company or there is consummated
               an agreement for the sale or disposition by the Company of all
               or substantially all of the Company's assets.

          Notwithstanding the foregoing, a "Change in Control" shall not be
          deemed to have occurred by virtue of the consummation of any
          transaction or series of integrated transactions immediately following
          which the record holders of the common stock of the Company
          immediately prior to such transaction or series of transactions
          continue to have substantially the same proportionate ownership in an
          entity which owns all or substantially all of the assets of the
          Company immediately following such transaction or series of 
          transactions.

                                       3
<PAGE>
 
          2.   Section 1.3 of the Plan is amended by deleting therefrom the
definition of "Eligible Employee" and inserting in lieu thereof the following:

          "Eligible Employee" means each employee of the Company or a Subsidiary
          who is both (1) a participant in the Retirement Plan and (2) an
          individual specifically listed on Appendix I as a Participant in this
          Plan.  Appendix I, which may also list former Participants, may be
          amended by the Board of Directors or the Committee.

          3.   Section 1.3 of the Plan is amended by inserting immediately
following the definition of "Participant" the following:

               "Person" shall have the meaning given in Section 3(a)(9) of the
          Exchange Act, as modified and used in Sections 13(d) and 14(d)
          thereof, except that such term shall not include (i) the Company or
          any of its Subsidiaries, (ii) a trustee or other fiduciary holding
          securities under an employee benefit plan of the Company or any of its
          Subsidiaries, (iii) an underwriter temporarily holding securities
          pursuant to an offering of such securities, or (iv) a corporation
          owned, directly or indirectly, by the stockholders of the Company in
          substantially the same proportions as their ownership of stock of
          Company.

                                       4
<PAGE>
 
          4.   Section 1.3 of the Plan is amended by inserting immediately
following the definition of "Plan Year" the following:

               A "Potential Change in Control" shall be deemed to have occurred
          if the event set forth in any one of the following paragraphs shall
          have occurred:

               (i)  the Company enters into an agreement, the consummation of
          which would result in the occurrence of a Change in Control;

               (ii)  the Company or any Person publicly announces an intention
          to take or to consider taking actions which, if consummated, would
          constitute a Change in Control;

               (iii)  any Person becomes the beneficial owner, directly or
          indirectly, of securities of the Company (not including in the
          securities beneficially owned by such Person any securities acquired
          directly from the Company or its affiliates) representing 15% or more
          of either the then outstanding shares of common stock of the Company
          or the combined voting power of the Company's then outstanding 
          securities;

               (iv) the filing with the Federal Home Loan Bank Board and/or the
          FSLIC or their successor of an application for Change in Control; or

               (v)  the Board of Directors adopts a resolution to the effect
          that, for purposes of this Plan, a Potential Change in Control has
          occurred.

                                       5
<PAGE>
 
               A "Potential Change in Control Period" shall commence upon the
          occurrence of a Potential Change in Control and shall end six months
          following the earlier to occur of (i) a Change in Control and (ii) the
          date on which such Potential Change in Control ceases to exist
          (whether by resolution of the Board of Directors of the Company or
          otherwise).

          5.   Section 1.3 of the Plan is amended by adding at the end thereof
the following:

          For A. William Schenck III, his Years of Service shall also include
          his years of service (26 years and two months) as an employee of PNC
          Bank Corp.  For Jaynie M. Studenmund, her Years of Service shall also
          include her years of service (11 years) as an employee of First
          Interstate Bancorp.

          6.   Section 2.1 of the Plan is amended in its entirety to read as
follows:

          2.1 - Eligibility Requirements.
                ------------------------ 

               Any executive who is an Eligible Employee shall be a Participant.

          7.   Sections 4.1(c) and (d) are amended in their entirety to read as
follows:

               (c) the monthly benefit payment which is payable in the form of a
          single life annuity under the Retirement Plan (in the form of a
          Qualified Joint and Survivor Annuity under the Retirement Plan, in the
          case of a married Employee with an Employment Date on or after January
          1, 1989); and

                                       6
<PAGE>
 
               (d) for A. William Schenck III, less the aggregate monthly
          benefit payments which are payable in the form of a single life
          annuity (if single) or a joint and 50% survivor annuity with his
          spouse as beneficiary (if married), upon attainment of age 62, under
          the following plans:  PNC Bank Corp. Pension Plan, PNC Bank Corp.
          ERISA Excess Pension Plan and PNC Bank Corp. Supplemental Executive
          Retirement Income and Disability Plan.

          8.   Section 4.1 of the Plan is amended by adding the following as a
new Section 4.1(e):

               (e) for Jaynie M. Studenmund, less the aggregate monthly benefit
          payments which are payable in the form of a single life annuity (if
          single) or a joint and survivor annuity with her spouse as beneficiary
          (if married), upon attainment of age 62, under the Retirement Plan for
          Employees of First Interstate Bancorp and its Affiliates, and related
          excess plan.

          9.   Section 4.3 of the Plan is amended in its entirety to read as
follows:

          4.3 - Change in Control.
                ----------------- 

               If a Change in Control occurs and, within 24 months after such
          Change in Control a Participant's employment with the Company is
          terminated by the Company without cause or if a Participant 
          terminates his employment with the Company under circumstances that
          would entitle such Participant to receive Change-in-Control-related
          severance and other benefits under an employment agreement with the
          Company, a monthly retirement benefit

                                       7
<PAGE>
 
          shall be payable to such Participant as follows:

               (a) If the Participant's employment is terminated on or after
          attainment of age 55, such Participant's monthly retirement benefit,
          payable commencing the first day of the month after termination of
          employment and continuing for the period benefits are payable under
          the Retirement Plan will be such Participant's Normal Retirement
          Benefit computed by crediting all Years of Service to such
          Participant's Normal Retirement Date with no reduction to be made for
          commencement of benefits before Normal Retirement Date.

               (b) If a Participant's employment is terminated prior to
          attainment of age 55, such Participant shall be 100% in such
          Participant's Accrued Benefit as of the date of termination of
          employment and such Participant's benefit shall be payable upon the
          date which would have been such Participant's Early Retirement Date if
          such Participant had continued employment, with the benefit payable
          unreduced for commencement before Normal Retirement Date.

          For purposes of this Plan, a Participant's employment shall be deemed
          to have been terminated within 24 months following a Change in Control
          in accordance with this Section 4.3 if, during a Potential Change in
          Control Period, whether or not a Change in Control subsequently
          occurs, such Participant's employment with the Company is terminated
          by the Company without cause or if such Participant terminates 
          employment with the Company under circumstances that would entitle him
          to receive Change

                                       8
<PAGE>
 
          in Control-related severance and other benefits under an employment
          agreement with the Company.

          10.  The Plan is amended by deleting in its entirety Section 4.4
thereof and by renumbering Sections 4.5 through 4.10 (and references thereto) as
Sections 4.4 through 4.9, respectively.

          11.  Section 6.1 of the Plan is amended in its entirety to read as
follows:

          6.1 - Amendments and Termination.
                -------------------------- 

               The Company shall have the right to terminate or amend this Plan
          at any time by resolution of the Board of Directors; provided,
                                                               -------- 
          however, that during a Potential Change in Control Period and during
          -------                                                             
          the twenty-four (24) month period following a Change in Control, this
          Plan may not be terminated nor may this Plan amended without the
          prior written consent of two-thirds (2/3) of those individuals who
          were Participants or Beneficiaries as of December 10, 1996, if such
          amendment would be adverse to the interests of such Participants or
          Beneficiaries (including, without limitation, any reduction of
          payments already due or being paid under this Plan). Any such
          amendment shall be stated in an instrument in writing, executed by the
          Company in the same manner as this Plan.

          12.  The second sentence of Section 6.2 of the Plan is amended in its
entirety to read as follows:

          In addition to the limitations on the termination or amendment of this
          Plan set forth in Section 6.1 hereof, no such termination or amendment
          shall result in the 

                                       9
<PAGE>
 
          forfeiture of (i) any augmentation of Retirement Plan benefits
          pursuant to Section 4.5 hereof or (ii) an Accrued Benefit to which
          John F. Maher had already become entitled pursuant to Section 4.2
          hereof or (ii) an Accrued Benefit (including a Spouse's Death Benefit)
          which any Participant who has attained age 55 would have been
          entitled to receive if he had terminated employment immediately prior
          to the effective date of such amendment or termination.

          13.  The Plan is amended by adding the following as a new Appendix I:

                                  APPENDIX I

                             LIST OF PARTICIPANTS

          Clifford A. Miller
          James F. Montgomery
          John F. Maher
          J. Lance Erikson
          Carl F. Geuther
          Edward R. Hoffman
          Anthony C. La Scala
          Michael M. Pappas
          A. William Schenck III
          Jaynie M. Studenmund
          Curtis J. Crivelli
          Eugene A. Crane
          Joe M. Jackson

          14.  Effective as of January 6, 1997, Appendix I of the Plan is
amended by adding Ray W. Sims to the list of Participants in the Plan.

          Except for Amendment number 14, which shall be effective as of January
6, 1997, the effective date of this Amendment No. 1996-2 shall be December 10,
1996.  

                                       10
<PAGE>
 
Except as herein modified, the Plan shall remain in full force and effect.

                         GREAT WESTERN
                           FINANCIAL CORPORATION



                         By:/s/ J. Lance Erikson
                            --------------------
                         Executive Vice President,              
                         General Counsel and Secretary

                                       11