Anyone who’s signed up (and paid for) pre-need plans is sure to be having worries lately with the announcement of Pacific Plans

of liquidity problems in view of the rising tuition fees.  Pacific

plans is the second pre-need company to announce such problems since

CAP did the same last year.  Note that both companies have major

financial backing (or so we think).

A group of planholders has set up this blog: Pacific Plans – Broken Dreams, with the following description:

We are the voice of the disenfranchised planholders of Pacific Plans.

The small voices of thirty five thousand parents and grandparents who

saved and dreamt. We were careful and we trusted. We seek what is right

and what is just. Our dreams have been unilaterally crushed and taken

away by a huge corporate giant apparently more concerned about legal

technicalities and profits.

The PPI website also has some “testimonials” (which are all positive, as expected), explaining some planhonders’ satisfaction with the explanations given by PPI.

But IMHO, problems such as this one are brought about by lack of

foresight on the part of the pre-need company.  Tuition fees had

been regularly hiked since the early 80’s, with deregulation of the

education industry.  While PPI maintains that it had stopped

selling open-ended plans since way back in 1992 (and that most

open-ended planhonders sold these plans in the seconday market for

profit), it’s still their responsibility to manage the movement of

these.  And if PPI had foresight, it should have stopped selling

these open-ended plans even before 1992.

Are pre-need plans sound investments?  These days, I would think

that pre-need companies and their agents are having difficulty with

such a hard sell.

And the way the economy is going, we may see more pre-need firms to come going the CAP/PPI way.

(via Inside PCIJ)

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