Pre-Need Company Time Bomb

[Juan Tamad]

SPYBIZ By S.A. Maguire
The Philippine Star 04/14/2005

Spybiz received very strong reactions from readers regarding this pre-need company whose name reminds one of a frosty looking metal. Spybiz informants dug even deeper and came out with several interesting facts about this company. It’s apparently owned by just one family, so in most likelihood, there will be no other partners to help bail it out if the company goes belly up. Its liability for the next nine years in terms of matured pre-need plans is close to P11 billion, while its trust fund liability based on the portfolio of active, in-force and lapsed accounts is in the P30 billion range. The actual trust fund is reportedly just a little above P300 million, prompting the actuarial officer to resign after discovery of these horrific facts. The family that owns the pre-need company had allegedly amassed so much wealth, buying several luxury condos and cars, living the high life at the expense of the plan holders. The owner’s son is said to be engaged in "inside robbery," getting money from at least three Metro Manila branches of the company to the tune of P500,000 to P1 million a week, and replacing the cash collections with personal checks. Plan holder payments are now in jeopardy because the son could no longer pay back the amounts. The son apparently learned well from the father. What’s more, the quirky side of the family became even more apparent when they hired a woman psychic who claimed that she had visions of anomalies in the company, which resulted in a witch-hunt that saw the arbitrary dismissal of several employees because of fabricated charges. Insiders predict that it’s just a matter of time before this company time bomb explodes.

What company kaya ito?

[mazdamazda]

Platinum.

Hirap talaga pag hindi marunong mag manage ng company... nasisira ang buong industry...

[IceColdBeer]

Yup Platinum, medyo matagal ng may problema yan.

[BlueBimmer]

ano kaya family name ng mayari?

[2004lynxghia]

hinayupak na platinum 'yan pagnagkaganon..me account kasi ako sa bpi na itinie-up sa long closed promo with this plaquetinum thingy..maintain no less than 50kpetot daw and abracadabra it will triple when the account holder meets some accident or becomes incapacitated or..ok, natepok..well, the deposit is still there intact..pero kalokohan na naman 'to sa unsuspecting depositors..

me oras rin kayo sakin..

[Bogeyman]

Balita ko, pati Pacific Plans under the Yuchengco Group of Companies eh nagkaka-problema na sa pondo. Mga tuition fees hanggang June this year na lang yung kaya nilang tustusan.

EDIT: Since Bankard holder ako, me tumawag sa king CS kahapon, nag-aalok ng parang family insurance on my card, for a premium of 200+ monthly along with my credit card bill. I declined the offer, saying na balak kong isara yung account ko soon. Tapos nabalitaan ko yung sa Pacific Plans. Naisip ko, since sister company ng Bankard ang Pacific Plans under YGC, baka kumikilos na sila para madagdagan ang pondo ng Pacific.

[Juan Tamad]

Yup Platinum, medyo matagal ng may problema yan.

Oh..kasi akala ko yun PACIFIC PLANS.... Nasa balita today yun.

Pacific Plans files for rehab due to high tuition
By Zinnia B. Dela Peña
The Philippine Star 04/14/2005

Pre-need firm Pacific Plans Inc., an affiliate of the Yuchengco Group, has filed for rehabilitation with the Makati Regional Trial Court as it foresees the impossibility of meeting future claims of its over 34,000 planholders owing to rising tuition fees.

In its petition, Pacific Plans said while it can still pay the tuition fees at present, it may not be able to pay future claims because of runaway tuition since the government removed the 10-percent cap on tuition increases in 1990.

Pacific Plans,however, said it has P341 million in cash for the current enrollment period and that it has in fact started releasing checks to planholders yesterday.

Pacific Plans also said it can return the money paid by its planholders, plus a return of seven percent net, per year from the date the plan was fully paid. "This would be done by replacing their open-ended plans with fixed-value plans which can be encashed by July 2010 when the government bonds in Pacific Plans’ trust funds mature," Pacific Plans said.

Pacific Plans said its obligation under the open-ended educational plans had far exceeded what it could as a result of the 1990 tuition deregulation policy supposedly to improve the quality of education.

"The deregulation of tuition fees has caused a tremendous rise in the cost of education, which in turn put an enormous pressure on traditional (open-ended) plans and their respective trust funds considering that pre-need companies dealing in such securities could not pass on the additional cost to their planholders," the company said in its petition.

"Each time benefits are paid to the almost 16,000 "availing" planholders, the funds remaining correspondingly shrink to the prejudice of the 18,000 who would file a claim years later," Pacific Plans further said.

Pacific Plans stopped selling open-ended educational plans in 1992, realizing that it would be a matter of time before the gap between tuition and its income would affect it the way it does now. The Securities and Exchange Commission ordered the whole industry to stop selling this educational plan 10 years later because of the same concerns.

Finding the petition to be in sufficient form and substance, the Makati RTC had issued an order preventing Pacific Plans from paying its creditors, suppliers and planhoders until the company is rehabilitated.

Not covered by the freeze order is the payment by Pacific Plans of the current tuition of its beneficiaries.

These beneficiaries, however, would get only tuition support. In general, this means that for non-exclusive schools, beneficiaries would get roughly the same amount they got in their last availment. Those in exclusive schools would get much less than their last claim because their tuition is roughly double than that in non-exclusive schools.

Pacific Plans said it had already informed its planholders about the filing of a petition for rehabilitation the swap of plans, exactly how much they would get in terms of tuition support, and the procedure in filing their claim and getting their check.

Pacific Plans has appealed to planholders who are not claiming tuition support this school year not to go to its offices to allow the smooth processing and release of checks. It said it would notify these non-availing planholders later individually.

[artpogi]

Balita ko, pati Pacific Plans under the Yuchengco Group of Companies eh nagkaka-problema na sa pondo. Mga tuition fees hanggang June this year na lang yung kaya nilang tustusan.

narinig ko nga yan sa radyo kanina

[mazdamazda]

Pacific Plans files for rehab due to high tuition

Prudentialife was able to avert such a disaster since my mom was able to give them the impending price increase trend a few years ago...

What hit the others hard are the "sky is the limit" plans...

[Juan Tamad]

Balita ko, pati Pacific Plans under the Yuchengco Group of Companies eh nagkaka-problema na sa pondo. Mga tuition fees hanggang June this year na lang yung kaya nilang tustusan.

EDIT: Since Bankard holder ako, me tumawag sa king CS kahapon, nag-aalok ng parang family insurance on my card, for a premium of 200+ monthly along with my credit card bill. I declined the offer, saying na balak kong isara yung account ko soon. Tapos nabalitaan ko yung sa Pacific Plans. Naisip ko, since sister company ng Bankard ang Pacific Plans under YGC, baka kumikilos na sila para madagdagan ang pondo ng Pacific.

Di ba under the RCBC group of companies ito? Di kaya affected na rin yun RCBC bank?