Pacific Plans planholders seek SEC assistance in release of tuition

Planholders of Pacific Plans Inc. are urging the Securities and Exchange Commission (SEC) to direct the pre-need firm to immediately resume its tuition assistance to secure the education of their children.

The planholders formed CARE (The Coordinating Alliance for Reform and Empowerment in the Pre-need Industry) and the Alyansang Reporma at Ugnayang Galing at Aruga ((ARUGA) as recognized legal organizations to protect and promote the interest of Pacific Plans planholders.

They said that while they respect the power and prerogative of the SEC to take certain measures that it believes would protect the interest of the public, the revocation of the certificate of incorporation of Pacific Plans’ subsidiary Lifetime Plans Inc. has resulted in the suspension of Pacific Plans’ tuition assistance, to the detriment of thousands of the pre-need firm’s planholders.

"With school opening just around the corner, the grim scenario awaiting planholders is that the enrollment of their children would be left hanging in the vine of uncertainty while the commission and Pacific Plans engage in legal squabble," CARE and ARUGA said in a joint letter to SEC chairperson Fe Barin.

Both organizations noted that "many planholders are pinning their hope for such assistance to ensure the enrollment of their children this coming schoolyear and that such assistance should cover the whole schoolyear and not merely the first semester enrollment."

CARE and ARUGA said the SEC should ensure that the greatest number of beneficiaries would benefit from such assistance by making it, for the time being, equal in amount to all planholders regardless of the original terms of their contract.

They have also asked the SEC to clarify its May 24 order to assure planholders of both Pacific Plans and Lifetime Plans that their rights under the terms of their contracts would not be impaired.

SEC commission secretary Gerard Lukban, for his part, said Pacific Plans should not make the agency’s order an excuse for it to evade its contractual obligations to planholders. "I believe part of the order is to continue paying the tuition. It’s out of our jurisdiction now. Their planholders can approach the court to require Lifetime to continue paying.

Prior to the SEC order, Pacific Plans had distributed P591 million in cash to its planholders, P250 million of which came from the personal resources of former ambassador Alfonso Yuchengco, the patriarch of the Yuchengco Group of Companies.

Pacific Plans said it would provide a liquidity window of another P300 million to its traditional planholders should the court approve its rehabilitation plan.

Lifetime Plans has strongly opposed the SEC’s order, saying the commission committed grave abuse of discretion when it cancelled the registration certificate of Lifetime Plans.

The revocation of Lifetime’s registration was allegedly due to the firm’s failure to comply with the requirements on transfer of property for shares to support its capitalization.

In its motion for reconsideration filed with the SEC, Lifetime said the questioned order failed to sufficiently state and discuss the reasons for the revocation of the certificate of incorporation, leaving the company to merely speculate on the basis of the commission’s finding that its submissions were "insufficient."

Lifetime alleged that the SEC failed to comply with the requirements of due process, particularly the requirements of notice and hearing.

The company, however, stressed that it had sufficiently and timely complied with all the requirements of the SEC. It explained that its alleged failure to submit sufficient documentation is not even expressly provided for by the Corporation Code to justify the revocation of the certificate of registration of a corporation.