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‘Pryce Plans is solvent but trust fund’s illiquid’ | 02/15/2009 2:15 PM

Pryce Plans Inc. remains solvent but is barely able to pay its obligations to plan holders in cash because its trust fund is illiquid, according to the Securities and Exchange Commission (SEC).
In a letter to Sen. Manuel Roxas II, SEC acting director for Non-Traditional Securities and Instruments Department Jose Aquino said the commission’s conclusion is based on trust fund reports submitted by Pryce Plans’ trustees, ChinaBank and Asiatrust Bank.

The SEC also noted that Pryce Plans has a trust fund deficiency of P56.17 million since it only has reserves of P113.23 million, consisting of listed equities and a little cash, as against the required 20 percent reserve of P168.4 million. 
Aquino noted that the firm has chosen to deal with its obligations to plan holders by giving them the option to avail of the cash settlement or dacion en pago, provided the consent of the availing plan holder is secured.
The dacion includes liquefied petroleum gas (LPG) from sister company Pryce Gases Inc., medicine from another sister company Pryce Pharmaceuticals Inc., and memorial lots provided other Pryce companies.
For those availing the swapping option, their maturity benefits are in effect converted into capital for dealership of LPG or medicines which are given immediately to them upon their assent.
However, for those who want settlement in cash, the SEC said Pryce Plans is implementing a “queuing program” due to the illiquidity of the assets of its trust fund.

Pryce Plans has assets of P1.28 billion as of the end of 2008 as against total liabilities of P974.56 million. The firm’s assets have shrank by 31.7 percent from 2004 when its total assets amounted to P1.87 billion.
As of the end of 2008, Pryce Plans’ trustee banks reported a total trust fund equity of P846.99 million, of which P590.73 million is for educational plans while P256.26 million is for Pension plans.
However, the cash portion of these trust funds amounted to only P106,839.00 or a mere 0.01 percent of total trust fund. 

This is because the bulk of these trust funds have been invested in real estate, primarily condominium units (P518.45 million), and memorial lots (P216.84 million) as well as some in listed equities (P113.12 million).

as of 02/15/2009 3:31 PM


February 15, 2009 - Posted by | Philippine Newspapers/Web News | , ,

1 Comment »

    My plan also matured last August 26, 2014 and submitted all requirements to collect the full amount of my pension. I received a letter from a certain Ruperto Marasigan, Jr. & Adelaida Lingao of Pryce, that the company is under Conservatorship and it could only settle my claim thru swapping options as follows: (a) 30% cash pay out; (b) 70% equivalent memorial lots; (c) 70% equivalent LPG; or (d) 70% Pharmaceutical products.
    I knew that the company is already being mismanaged and would default in the payment of its obligation as early as May 2009. I filed a court case against the company, but it was dismissed on a technicality. My position then in 2009 and it still is now prior to date it was placed under Conservatorship, is that, by reason of Pryce’s admission that it is illiquid or insolvent, then it loses its right to avail or make use of the period as expressly provided for under Article 1198 of the Civil Code of the Philippines. Hence, plan holders who have fully paid the pension premium may demand immediate full payment of the pension plan from Pryce without waiting for its maturity date.
    I am also wandering what SEC, Office of the Insurance Commissioner and/or government agency concerned have done since Pryce became illiquid or insolvent many years ago to protect its plan holders. Pryce’s officers and directors should be made criminally and civilly liable for the mismanagement of the company and defrauding its plan holders of their hard earned money. Have they checked if Pryce’s directors and officers who are stockholders may still have unpaid subscriptions, etc? The other companies allegedly assisting Pryce may, in fact, be dummy corporations whose assets and/or properties may also be taken to secure payment of its obligations to plan holders.
    Atty. Manny Fule

    Comment by manny fule | October 7, 2014

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