If your pre-need firm offers Soli Pera, grab it!
GOV’T ASLEEP?: Despite all the reports the past few years about failing pre-need companies and bouncing checks, in spite of all we know about an impending pre-need disaster, we do not see any determined government effort to address the situation.
The government must step in because the consumers, based on experience, will be left shortly holding the proverbial empty bag again.
Planholders of the College Assurance Plan (CAP), for instance, have been asking one question that until now remains unanswered: “Do we continue paying, considering CAP’s problems?”
I have yet to hear the Securities and Exchange Commission say a categorical Yes or No. While the SEC waffles, many planholders continue to pay, and pray. Then there are those who have been scared enough to stop pouring more water into the sand.
Time will tell who is right or not. Either way, the SEC has done them a distinct disservice by default. Such official inaction is also the reason for the slump in pre-need sales.
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BASIC QUESTIONS: Another question of planholders that has remained unanswered is: “What are my options given the current problems of the pre-need industry?”
There are millions of planholders and not even one-tenth of them have been told what to do in this their hour of uncertainty. It is a tribute to the Filipino patience that things still amble along.
But wait until the dam collapses and all the sordid details are laid bare. By that time, it would be too late for planholders to weigh their would-be options.
With the failure of government to take the pre-need bull by the horns and deliver us from the confusion, let me offer answers to those two basic questions:
- On whether or not to continue to pay, my suggestion is for you to STOP PAYING if your plan is the open-ended type.
- As to what options are left, I suggest that you ask your pre-need company.
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OPEN-ENDED TYPE: The planholder must check if his plan is the open-ended type or the fixed-value type. The open-ended type is the one in trouble, because it promises to pay whatever the tuition will be — and we all know that tuition has skyrocketed in the past 12 years or so.
But if the plan is the fixed-value type, or one that pegs the promised payment to a specific pre-computed amount, you can continue paying because it remains a good and viable product. Being more predictable, this one has been more easily managed.
On what the options are, as I said in last Sunday’s POSTSCRIPT, some companies can pay more than other firms in terms of terminal value or buy-back or redemption.
In fact, I think some companies can give back the whole amount (“Soli Pera”) that was paid, plus some interest. If you ask if CAP can do that too, frankly I do not know.
It is about time planholders asked the SEC all the questions they have been afraid to ask. (Like patients suffering from some terrible affliction, many of us are afraid to be told the truth. By the time we learn the sad fact, it is usually too late.)
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MONEY-BACK: If your pre-need company offers more than what you have paid, you are lucky. Grab this “Soli Pera” option.
Not too many of them can do that, because of the government’s deregulation policy adopted in 1992 allowing schools to raise their tuition without limit.
This sky-is-the-limit policy on college tuition is the single biggest cause of the impending collapse of the open-ended educational plans. And its full effect is HERE NOW.
For the information of planholders, terminal value is indicated at the back of the contract. It is a ready option for those who want out for whatever reason.
But termination comes with a steep price. The planholder gets only half of the payments made if the plan is fully paid. The percentage goes down depending on how much of the total price has been paid.
It is important to remember that this terminal value in upon the initiative of the planholder.
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MEDDLING POPE: Maybe we Catholics just did not want to raise contentious issues while Pope John Paul II was lying in state.
But now that the saintly Pontiff has been interred, we feel free — in fact compelled — to comment on President Arroyo’s political remarks about him.
Ms Arroyo told CNN anchor Richard Quest in an interview upon her arrival April 7 at the Vatican that John Paul II “had a very, very keen sense of understanding of what was happening in the Philippines.” That was okay.
But Ms Arroyo also said: “…and he was very encouraging towards me with regard to my taking steps to make sure that I would do what I could do in order to promote morality in Philippine society.”
She was talking about the role that the Vatican played in inspiring the military-backed EDSA-2 uprising in January 2001 that toppled then President Estrada and installed her, then the vice president, as successor.
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WHY ONLY NOW?: Ms Arroyo did not reveal how the late Pope egged her into grabbing the chair from under Mr. Estrada, who was by then already hobbled by desertions, street marches and a clutch of serious charges.
Did the Pope give her marching orders by phone, letter or SMS (text to Pinoys)? Or was the encouragement conveyed through a politically active Jaime Cardinal Sin or the more reserved papal nuncio in Manila?
Did Ms Arroyo catch the Holy Father’s counsel in her inner ear or did she hear a booming voice, a la Hollywood’s “Ten Commandments,” breaking through the dark clouds accompanied by lightning?
At kung ganoon nga ang nangyari, bakit ngayon lang sinasabi ito, ngayong patay na si Pope? And why is she telling us this indelicate matter only now that the Pope has passed away?
Precisely because John Paul II is dead, and is presumably not likely to rise from the grave after three days to refute her fantastic claim of papal collaboration?
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TOP SECRET: Assuming John Paul II really encouraged Ms Arroyo to grab the presidency from Mr. Estrada then being accused of plunder, corruption and some vices above and below the belt, is this not supposed to be a secret between the conspirators?
It has to be a secret of the highest order, because plotting the downfall of the president of a friendly sovereign state is blatant interference in the internal affairs of another country.
The Vatican, a full-fledged state despite its comparatively small size, has full diplomatic relations with the Philippines, the biggest Catholic nation in Asia and one of the major contributors to the coffers of the Church (assuming the collections from the faithful are not handled with sticky fingers).
To say the least, it was indelicate of Ms Arroyo to have disclosed something about John Paul II smelling of conspiracy less than a week after he died.
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PRESSURE ON BURMA: Talking of interference, there is the interesting case of Myanmar (Burma) whose assuming the rotating chairmanship in 2006 of the Association of Southeast Asian Nations (ASEAN) is being opposed vigorously by some non-members.
Opposition is anchored mainly on the failure of Burma’s ruling military junta to adopt democratic processes, improve its human rights record, and release opposition leader Aung San Suu Kyi, whose party won the 1990 elections but was not allowed to govern.
Pressure to forestall Burma’s assuming the chairmanship next year has come mainly from the United States and the European Union. Brussels and Washington have imposed tough economic sanctions on Burma.
Whatever their motive, this is still interference.
But in this interdependent world, relationships always involve varying degrees of meddling in affairs of other states or groups of states, who are at times willing to bend over backwards and adopt suggestions from outside.
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LOSS OF FACE: In handling Burma and its ASEAN partners, however, Western powers may want to pay attention to the Asian concept of “loss of face.”
Instead of broadcasting that it has been pressuring Burma to adopt “democratic ways” and ASEAN to bar Burma’s chairmanship in 2006 unless it gives in to the pressure, Western powers may want to temper their rough style and move more discreetly.
Backdoor diplomacy, use of good offices, and such less obtrusive means are more effective among us ever-sensitive Asians who loathe losing face whenever we have to succumb to outside pressure.
Burma knows it cannot afford to defy any negative consensus in the region and among the powers trying to recreate the rest of mankind in their own image, but it should be given a chance to work out things quietly without having to lose face.
I am sure ASEAN, left to its own devices, could work out something acceptable to Burma, to the other ASEAN members, as well as to the policemen and money-lenders from the First World.