THE PRESBYTERIAN Church in Ireland has voted in favour of contributing £1 million to a hardship fund as part of a rescue plan for the Presbyterian Mutual Society (PMS) put forward by the Northern Ireland Executive.
The North’s First and Deputy First Minister informed the church last week that it looks increasingly unlikely a commercial bank will step in and take over the PMS responsibilities.
The society collapsed in November 2008 leaving 10,000 members without access to their investments and savings.
Members funds were frozen in late 2008 after a run on funds as members moved cash to other financial institutions that offered protection under a government guarantee scheme.
The directors of the society at the time blamed the credit crunch for having a “severe effect on the society’s level of liquid assets”.
Peter Robinson and Martin McGuinness have put forward an alternative to the favoured option of a commercial bank taking over the PMS.
This plan could potentially involve the North’s Executive putting up more than £200 million.
The proposal requires the firm backing of the UK Treasury which would advance the capital required to finance the rescue package through a long-term loan to the North’s Executive.
An integral part of the rescue package revolves around the creation of a hardship fund which would directly help many of the smaller savers in the PMS who have been the worst hit since its move into administration.
A recent court ruling found that any PMS member who had less than £20,000 in the society could not be classified as a creditor in the administration.
This means small savers and investors would not receive any money from the administrator of the PMS until creditors have been paid in full.
The rescue proposal put forward by the North’s Executive specified that “a sum of at least £1 million would be forthcoming from the Presbyterian Church in Ireland” in order for the rescue plan to progress.
A special meeting of the Presbyterian Church’s General Assembly took place yesterday in Belfast where delegates gathered to vote on special resolutions put forward in relation to the PMS crisis.
The 1,200 delegates who attended the special assembly unanimously agreed to a total of seven resolutions, including a £1 million contribution by the Presbyterian Church to the hardship fund.
The Presbyterian moderator Dr Stafford Carson said the decision was a show of “unity” and reflected the “common purpose” of the Presbyterian Church and its members to help people who had suffered because of the collapse of the PMS.
Dr Stafford said: “I do not think this is the end of the road but it’s another step along the road and will enable the Northern Ireland Executive to put the proposal it has discussed in front of the incoming prime minister. We do not expect a final solution to the PMS before the general election,” the moderator said.
Although the Presbyterian Church has agreed to contribute £1 million to the hardship fund, no decision was taken yesterday at the general assembly on how the church will raise the money.
