TPG Planholders


The hurt and emotional distress experienced by TPG Planholders is to be expected with the sad reality of the pre-need industry failure.  Just last year, Prudential Life Plan also had to give up on the pre-need industry.

 

Mr. Colayco has been dealing with this tragic turn of events since 2002.  He preferred to limit the audience of his explanation to planholders who asked since only they would be interested.  However, since you have gotten in touch with us, we would like to have you and others also understand where Mr. Colayco is coming from.

 

To summarize, the reality is that government regulations killed the industry.  Mr. Colayco returned to The Professional Group or TPG (after he had sold it before the regulation changes) to propose a radical solution (mutualization) to help solve the problem.  Unfortunately, the court did not accept it for technical reasons.

 

What we are doing now at Colayco Foundation for Education (CFE) is precisely educating people to prepare for their educational plans and retirement themselves. We are not offering any financial plans nor are we promising returns. Colayco Foundation is also not an investment company.  This is a basic difference between CFE  & TPG and the other financial plans companies.

 

Mr. Colayco has no specific solution to those who were financially affected by the pre-need industry.  Everything in this world has a risk.  There will always be mistakes and regrets.  We can only move forward and offer options for the future with a clear evaluation of the risks.  We believe this is a better solution than to just sit back and do nothing.

 

Below, please read the statement made by Mr. Colayco in 2009 to some planholders who contacted him.  In fact, since 2005, Mr. Colayco included the situation of the Pre-need Industry in the Appendix E of his second book “Making Your Money Work.”

 

The explanation is still basically the same today and Mr. Colayco has never been deceitful.

 

From Mr. Colayco in 2009:

Time and again, planholders of TPG come back to me about the problem with TPG.  I have personally answered those who have written me directly.

TPG has written to all planholders and if they have the correct address in the documents, they should have received the letters.  Or if they did not receive their letters, the contact numbers of TPG have not changed at all:

 

Please contact Mr. Noel P. Mojica

Tel Nos. 5337061, Direct Lines 5339475 or 5336381

Email customercare@tpgplans.com

Address: 2nd Flr. The Professional Group

37 EDSA corner Boni Ave. Mandaluyong City

 

Unfortunately, my effort to share whatever financial experiences I have are taken negatively by others.

 

Below is a summary of events over the past 10 years.  Recent events in the pre-need industry have proven me right in my warnings that given the sudden changes in government regulations way back in 2000, the industry would be hard-pressed for survival.

 

I have been out of TPG operations since 2002 but I chose to return when the industry crisis actually started in 2004.  I continued to make myself available as I realized that the interest of the plan holders had to have representation in TPG.   At that time, the company was owned 86% by two investors, namely LBC and ATR Kim Eng Capital.  I personally owned a very small percentage of TPG, though others may think otherwise.  I guess this is because I am the only one who has come out in the open to offer solutions to the Pre-need and TPG problems.

Until recently, (N.B. this was in 2009) when the Legacy issue broke out, most of the other Pre-need company owners and managers have stayed away and just assigned their plan holders relations to their legal counsels.

 

For your information, here is part of my letter to the TPG plan holders who wrote to me directly in 2004.

 

“It is with deepest regret that our TPG dream did not come true.  Since 1999, precisely because I saw the need to increase financial resources against the changing market conditions and regulatory policies, I and my other partners sold over 80% of TPG to LBC (Carlos Araneta) and ATR Kim Eng (one of the largest investment banking groups in the country). These new owners were to infuse new resources and integrate TPG operations with their insurance and retail financial services operations. The new owners contracted me to continue for a few more years to make sure that there was a smooth turnover and to be bought out fully by 2002.  Unfortunately, with the highly publicized collapse of the two leading Filipino Pre-need companies that year, the government changed its rules for the pre-need industry abruptly, against the solid objection of the Federation of Pre-Need companies.  As such, TPG, as a stand-alone company could no longer sustain its operations as a pre-need company.

At the same time, the owners, LBC and ATR Kim Eng got involved in a big legal dispute, which has been publicized (and continues to be written about) a lot in the newspapers, TV and radio. I did not have to stay in TPG but I chose to stay because without me, the plan holders would not have any representation.  I know I can somehow represent the best interests of our plan holders, myself being a holder of over 20 TPG plans, not to mention the plans of family and friends.

The owners of TPG continue their legal battle to-date and TPG is caught in the middle. (N.B. Note that in 2011, LBC Bank was closed by the BSP) In view of the quarrel between these two major shareholders, I may have to write off as losses my remaining investment in TPG until rehabilitation is complete.  As you can see, I too, am incurring major losses and these losses will not be recovered until all plan holders are legally satisfied by court action.  The court made its judgment so that in order that ALL planholders (availing, waiting and still paying) are somehow satisfied by getting their money back plus a return not lower than savings deposits. I tried to give the best solution in a troubled situation.

 

I have done everything I personally can and I continue to give a lot of my time precisely to help the plan holders get back their money but everything is in the hands of the court. I do not have any management contract with TPG. Without remuneration, I face all the plan holders even if I am not personally liable for what happened. I personally come out on radio and TV to explain the situation. Together with the loyal executives of TPG, we have been working so hard to look for all ways to improve the currently approved benefits and prevent more damage to the plan holders.

 

As I always advise, all investments have risks.  The risk that seriously eroded the pre-need industry’s capacity was the arbitrary action of government (SEC).  Though it approved the plans that were sold based on given rules, it changed the rules and made it to apply RETROACTIVELY.  This greatly hurt the sustainability of operations and thus the rehabilitation of five top Filipino preneed companies.

 

The investment with the least risk is “government securities” which has a very low rate of return.  An investment in TPG would have had a much higher return.  Given the fact that TPG has ceased operations, the court ruled based on the principle that all plan holders should at least get their money back.  This is the essence of the rehabilitation plan of the court.  Plan holders will get their money back plus higher than a savings rate of return. However, this will be distributed over a longer period.

 

I have offered other solutions but the court has made its choice.   In the meantime, economic conditions changed for the worse but I still continue to look for new alternatives to enable the trust funds of TPG to provide benefits to planholders higher than what the court has provided.  (N.B. Again this was in 2009 and today, 2013 economic conditions have improved but TPG had been stopped from investments that could have provided the higher returns.  Had the “Step Up” program proposed for TPG been accepted by SEC, TPG would not have gone to the courts and would have tripled its Trust Funds for the benefit of the planholders.  The government chose a legal solution as opposed to approving a final solution.)

 

I have continued to be visible even if plan holders might misunderstand what I am doing. I know it is better that plan holders can communicate with me rather than keep quiet and stay behind the scene.  I choose to be visible because I know our plan holders deserve it.”

For those who can, we offered an option for a big discount in the tuition at National University, which provides special arrangements for TPG plan holders.  (N.B. This was in 2009 before the Sy Family of SM bought National University.) We continue to look for better options for plan holders.

I sincerely apologize for the sad development at TPG.  I am still hopeful that the rehabilitation plan will eventually provide better results than what was ruled by the court.  In the meantime, I try to objectively offer for free, investment options through www.onewealthynation.com and www.colaycofoundation.comwww.kskcoop.com and the various articles I write in other websites, newspapers and magazines.

 

I am trying to teach people the right principles in controlling their financial lives.  I want them to learn the true and correct financial lessons from actual economic problems.  Nothing is permanent and failure is just as temporary provided we learn from it.   Perhaps those who choose to discredit me are doing a disservice to those who want to learn by putting doubts in their minds about the correctness of the sound principles I espouse.

 

There are so many more positive options I can do to help the greater majority.  I hope that all will see this point of view.

 

God bless you too.

FJColayco