My pension plan issue with Pryce Plans, Inc.

Five years ago, I entertained hopes of promptly receiving the lump-sum cash settlement of a modest pension plan I had signed 10 years earlier with Pryce Plans, Inc., based on the tenor of the notice they sent. I wrote to the company, attaching all the requirements and such.

My hopefulness was doused when I received a notification form advising me to call before Sept. 17, 2008 “to confirm schedule of check release.” What followed were frustrating efforts to follow up, both through phone calls and personal trips I made to the Pryce Plans office in a high-rise Makati building owned by the company.

Not one of those I was referred to could provide a definite date when I could receive my check. Finally a lower-rung executive admitted to me that the company was having problems settling cash claims. I had to wait longer, she said, since claims that fell due in 2006 had to be serviced first.

Last Wednesday, on the advice of my brother who is president of an insurance company, I sought an audience with Salvador P. Escano, Pryce Plans president.

Here’s what happened:

After I gave my name to the receptionist and she had gone into the executive office, she asked me to wait for the designated person handling my account to see me. “Can’t I see Mr. Escano personally?” I queried. The reply was “No, sir, someone will attend to you.”

A young lady came with documents on my claim. She told me what I had been told in 2008: that 2006 claims were still being processed. I cut short the discussion and again requested that I talk directly with Mr. Escano.

 The response: Mr. Escano was occupied at the moment and would send a lawyer to talk to me. I protested but decided to find out what the lawyer had to say.

 A young-looking lawyer conducted me to the Pryce Plans office two floors below Escano’s on the 17th floor. He presented to me the company’s settlement offer, consisting of two options, both of which I found unfair thus unacceptable.

One is cash settlement equivalent to only 40% of the full value of my claim. The other is dacion en pago, 80% equivalent value of my cash claim in kind — either liquefied petroleum gas from Pryce Gas, Inc. or memorial (burial) plots provided by other Pryce companies.

He made it clear that I had to take either offer, or would get nothing as that’s the way the business practice goes. Realizing my firm refusal to accept, the lawyer offered to raise the 40% to 60%, or the 80% in kind to 100%. He assured me he could get the management to approve it.

I told the lawyer that any offer lower than the full amount of my cash claim is unfair, to me or to any other plan holder. In the first place, as he pointed out, the company automatically deducts a 10% service fee from the cash claim.

Look at these figures and judge for yourself if the offer is fair.

My cash claim is P300,000. It may be deemed small, but it’s the designated return-value of the P252,900 pre-need price I fully paid from March 17, 1998 to Sept. 19, 2002.

Minus the 10% service fee, the net amount becomes P270,000. If I accepted the 40% settlement (computed using the net amount) I would receive only P108,000 — not even half of what I had paid the company.

 Now consider this: the P252,900 I paid formed part of the P846.99-million trust fund equity that Pryce Plans had designated as follows: P590.703M for education plans and P256.26M for pension plans, per records of the Securities and Exchange Commission as of 2008.

However, the cash portion of these trust funds amounted to only P106,839 (or 0.01% of the total) in 2008. Why? Because Pryce Plans had invested the bulk in real estate, primarily in condominiums (P518.45M), memorial lots (P216.84M), and other equities (P113.12M).

Apparently these investments have gone badly. Nonetheless, the SEC reported in 2009 that Pryce Plans “remain(ed) solvent and liquid” due to these multimillion non-cash assets. Ergo, the company isn’t bankrupt. It has been allowed to operate minus the selling of new education and pension plans. 

So why has Pryce been trying to induce plan holders like me to accept only 40% of cash claim, when it’s the one at fault? The lawyer even warned that if I didn’t grab the opportunity offered now, the retrievable claim would go lower in the following years.

As for the dacion en pago, if I accepted it I would have agreed to act as a sales agent for Pryce — to sell either LPG or memorial lots in order to recover the cash value of my claim.

Definitely this is an exploitative proposition I cannot countenance.

When the Pryce lawyer failed to convince me, he asked for my counter-proposition. I told him I did not come to bargain: “Relay my stand to Mr. Escano and let me know his response.”

I have found out from its website that Pryce Plans has removed from public scrutiny data about who their key executives and board members are.

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Email: [email protected]