Pacific Plans draws up loan program for planholders

To show good faith to its clients, Yuchengco-owned pre-need firm Pacific Plans Inc. has drawn up a loan program to assist qualified planholders for their immediate financial needs.

Under the plan, the loanable amount shall be equivalent to 75 percent of the computed plan termination value for educational plans or pre-maturity value for pension and life plans.

The loan will be secured by a deed of assignment on the planholders certificate of full payment and policy on pension and life plans.

Pacific Plans said the loan shall be charged an interest rate of 12 percent per annum plus six percent per annum processing and other incidental fees. Principal shall be paid via 12 equal monthly amortizations.

The loan may only be renewed upon full payment of the previous loan and after the end of the period applied for.

Pacific Plans said a loan shall be considered in default if the planholder fails to update the amortization payments at the end of the two months grace period. The total loan shall become due and demandable and the assigned certificate or policy shall be forfeited.

The loan program is intended to improve Pacific Plans’ trust fund.

Pacific Plans was earlier issued a dealership license by the Securities and Exchange Commission following the pre-need firm’s full compliance with the requirements on liquidity, capitalization and the actuarial valuation report.

Based on the company’s audited financial statements as of Dec. 31, 2005, Pacific Plans has a paid-up capital of P210.1 million, well above the minimum paid-up capital requirement of P100 million for a three-plan type pre-need company.

Pacific Plans has no trust fund deficiencies based on actuarial reserve liability (ARL) using a 12 percent interest rate assumption. Its trust fund amounted to P13.15 billion while its ARL was P11.79 billion.

The Makati Regional Trial Court approved in April Pacific Plans’ alternative rehabilitation plan to allow the pre-need firm to continue servicing its over 400,000 planholders. The alternative rehabilitation plan is based on the percentage of average school fees for school year 2005-2006 with tuition support on every enrollment period until 2009-2010.

Similar to the original plan, the benefits under the PEP traditional plans will be translated to fixed-value benefits as of Dec. 31, 2004, which will be termed as base year-end 2004 entitlement. Last school year 2005-2006, Pacific Plans released a total of P591 million in tuition support to its 16,000 availing open-ended planholders.