CAP continues paying benefits to planholders

MANILA, Philippines - College Assurance Plan Philippines, Inc. (CAP) announced yesterday that it continues to pay educational benefits to its planholders, beginning with those who were scheduled to receive their plan benefits for previous school years in accordance with the court-approved revised rehabilitation plan.

The announcement was made following the sale of CAP’s MRT III bonds to the government. The sale was executed after the government acquired a majority stake in the Metro Rail Transit Corp. (MRTC), which operates the MRT III line. The resolution approving the release of said funds to pay the planholders was finalized during a special board meeting.

Prior to this announcement, the pre-need company has already been paying its planholders since February 2007 through its trust fund from the time that the court approved its revised rehabilitation plan in November 2006. The trust fund’s real estate assets, which are projected to appreciate and acquire higher value given the strengthening of property values in the real estate industry, may well be its surprise golden egg that will sustain the payment of future plan benefits.

The MRT III bonds were sold at the best possible price as approved by the Makati City Regional Trial Court. Proceeds of this transaction will be used to pay plan benefits according to the amounts and schedule of payments set by the court in the revised rehabilitation plan. In this case, those who were enrolled during the school year 2005-06, 2006-07, 2007-08, and 2008-09 are scheduled to receive such plan benefits.

A total of 334,000 checks are ready for release to 147,000 planholders. They are advised to go to any of the 32 CAP offices and paying centers located in different cities for verification. They can also visit www.cap.com.ph for a list of names of planholders whose checks are ready for release in these paying centers. To date, there are 26,000 unclaimed checks worth P22 million waiting to be claimed by beneficiaries.

CAP resorted to the rehabilitation plan - an option provided for by law - as a result of SEC’s arbitrary implementation of the actuarial reserve liability (ARL) and accounting rules of 2002 that subsequently led to the suspension of the company’s dealer’s license to sell in August 2004.

Under the approved rehabilitation plan, the benefits to be paid are determined and fixed by the court, together with the schedules and dates of payment. Despite the numerous setbacks suffered in the past years prior to the filing of the petition for rehabilitation, CAP was still able to graduate 80,000 college scholars, disbursing over P13 Billion as plan benefits to various schools and universities nationwide. There are currently over 100,000 enrollees being supported by CAP.