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Monday, April 25, 2005
Pre-need firm assures plan holders of payment
By Ben O. Tesiorna
Financially stricken Pacific Plans, Incorporated (PPI) assured all its plan holders of continued service despite the company's woes.
In their letter to plan holders, Ernesto C. Garcia, Pacific Plans chairperson, said the company filed for rehabilitation with the Makati Regional Trial Court and under this "the PPI will replace open-ended plans with fixed value plans at no extra cost to all plan holders".
Under the fixed value plans, the availing plan holder will receive a tuition support which they can claim up to May 7 aside from the new fixed value plan that would mature and can only be claimed in 2010 with a seven percent interest per annum.
"Under the proposed arrangement plan holders would be able to cash in their new fixed-value plans only in July 2010 approximating the maturity of government bonds which represent the bulk of PPI's trust funds. No bonds would be released until then. But these plans can be sold to any interested party at any time as is the practice now," Garcia said.
Expressing apology on the sudden changes of their plans, Garcia said the tremendous rise in the cost of education after the government allowed schools to raise their tuition without any limit starting 1992 has started to put a lot of finance pressure on open-ended traditional educational plans, especially that PPI could not pass on to plan holders the increases through higher prices.
Garcia said PPI has already sent 56,000 students to school nationwide under their open-ended traditional educational plans since 1990.
Garcia said PPI has been expecting it to happen early on and has even stopped selling open-ended plans in 1992 in favor of the fixed value plans.
"Unfortunately, the full effect of the tuition deregulation 13 years ago is now upon us. The PPI is unable to pay its current availments without prejudicing its remaining plan holders," Garcia said.
Next week, according to Garcia, PPI will start releasing the support tuition fee for plan holders who wanted to avail of it.
For Bisaya stories from Davao. Click here. (April 25, 2005 issue)
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