SEC allows pre-need firms to sell $-denominated plans to OFWs

The Securities and Exchange Commission (SEC) has allowed pre-need firms to sell dollar-denominated plans to overseas Filipino workers (OFWs) for a wider market coverage.

SEC chairman Lilia R. Bautista said the commission agreed to allow pre-need firms to sell dollar-denominated plans following approval by the Bangko Sentral ng Pilipinas.

Existing banking regulations do not prohibit the domestic sale of dollar-denominated pension plans to residents for as long as no foreign exchange will be sourced from the banking system or from non-affiliated foreign exchange corporations.

Bautista said pre-need firms that will sell dollar-denominated plans abroad should comply with the rules.

The SEC approved last week the registration of Platinum Plans’ P550-million or $10-million worth of dollar-denominated pension plans to be sold to OFWs and the additional licensing of P1-billion worth of individual pension plans with price increase.

Platinum is optimistic it could sell P1-billion worth of plans as it is in the process of improving and expanding operations. The company has ready market and tie-ups with non-government organizations which handle the orientation of the overseas market.

Also approved last week was the application of PET Plans Inc. for the initial registration of P25-million worth of dollar-denominated pension plans. The plan provides for the payment of $100 per unit at the maturity date of either 10 or 15 years.

A cash allowance of $20 per unit shall be paid to the planholder at the end of 10th, 11th, 12th, 13th and 14th year.

Starting at the end of the first policy year, additional pension benefits may be credited to the plan based on the performance of the trust fund. The additional benefits will be given to the planholder provided the total amount of payment is at least equal to $20 and the interest rate achieved the trust fund is greater than the assumed rate of 7.25 percent in the actuarial study.

PET Plans submitted a proposed investment strategy showing that the 7.25-percent interest rate will be achieved for its pension plan.