MANILA, Philippines - Pre-need plan provider PermanentPlans has sought court-assisted rehabilitation to be able to pay maturing policies of planholders on a staggered basis after the global financial meltdown gnawed substantially into its trust funds.

In a petition dated May 21, 2009, Permaplans asked the Makati Regional Trial Court to allow it to pay off planholders who may wish to preterminate their plans based on a 60-40 percent asset-cash formula, where 40 percent would be settled in cash and 60 percent in the form of assets such as memorial lots.

For benefits already maturing, the company also proposed a five-year payment in installments, where 10 percent will be paid on the first year, another 45 percent on the fourth year and the remaining 45 percent on the fifth year.

A market-based interest rate will also be paid to compensate the client for the staggered payment schedule.

In a statement, Permaplans president Juan Miguel Vasquez apologized to planholders for the inconvenience.

?We have done this to assure you [that] you will be paid. We have weighed the options and the planholders will be better served by rehabilitation,? he told planholders.

?The rehabilitation plan will allow Permaplans to settle its maturities in full, albeit in an alternative deferred settlement mode in order to conserve the present asset inventory of its trust fund,? he added.

With the Securities Exchange and Commission order freezing its trust fund assets and requiring prior clearance from the Commission before payments could be made, Vasquez said Permaplans was put ?in a state of paralysis.?

?We have to protect our trust fund; we can not sell securities and cannot even settle claims all leading to our decision to file for corporate rehabilitation,? Vasquez said.

?There will be slight delays. And because of this delay, coupled with Permaplans? augmenting the trust fund with its own corporate assets, we will be able to pay the maturities when they fall due without any diminution of entitlement,? he said.

Permaplans, which has about 11,000 planholders, told the court that it had current liabilities of P62 million, against current assets of only P35 million as of end-2008. Its trust fund is also deficient, when compared to its preneed and insurance reserve liability.

Based on the actuarial validation report as of Dec. 31, 2008, the trust fund equity covering preneed and insurance reserves for the pension plans has an asset balance of P403 million while the preneed and insurance reserves amounted to P656.01 million. Thus, the trust fund equity for the pension plan was deficient by P253.89 million.

Vasquez said the company?s trust assets incurred huge losses in 2008 due to the global and local economic meltdown.