The SEC’s Non-Traditional Securities Department, which oversees the operations of pre-need firms, has been ordered to continuously monitor the trust funds of Pacific and Platinum even if they are already under rehabilitation.
A trust fund refers to the fund set up from the planholders’ payments separate and distinct from the paid-up capital of the company. It is established with a trustee bank under a trust agreement approved by the SEC and cannot be used by a pre-need firm for any other purpose except for servicing planholders.
The Makati RTC cleared the petitions for rehabilitation filed by Pacific and Platinum despite stiff opposition from the SEC and their respective planholders. Appointed as rehabilitation receivers were Mamerto Marcelo and Antonio Tupaz for Pacific and Platinum, respectively.
The appointed receivers were given three months to submit their respective recommendations to the court.
Pacific and Platinum both filed for rehabilitation this year, citing financial difficulties brought about by the deregulation of tuition increases in the 1990s. The deregulation bloated liabilities of those who offered open-ended education plans.
Pacific 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.