Northern Ireland

Presbyterian Church 'not asked' for more PMS cash

PMS name plate
Image caption Thousands of PMS members have been unable to retrieve their savings

The Presbyterian Church says it has not been formally asked to pay extra money into a bail-out fund for the Presbyterian Mutual Society (PMS).

It is thought the church's contribution could rise from £1m to £5m.

The government has said it will provide £25m in cash and a £175m loan to the PMS. The NI Executive will also provide £25m if agreement is reached.

Rev Stafford Carson said the church expected to be asked to pay more but was waiting for further information.

"We haven't actually been asked to increase our contribution," the former Presbyterian moderator said.

"Last April, the general assembly considered a request at that time to contribute £1m to a hardship fund and it readily agreed to do that.

"We haven't really heard anything different since with regard to that contribution, obviously things have moved on and there is a whole new mutual access fund that is being considered."

The PMS crashed in November 2008, owing almost 10,000 investors money.

Since then, larger savers have received 12% of their money back. But, those with less than £20,000 saved got nothing.

If agreement on a rescue package is reached, it will not be in place until next April at the earliest.

Rev Carson said any increased contribution from the church would have to be raised from "among the same people that suffered throughout this crisis".

"While the financial markets talk very easily about millions, £1m is a lot of money to the church and £5m is obviously five times that money," he added.

"Many congregations are currently struggling and we are going to have to raise this money from amongst those congregations."

Negotiations

Rev Carson said the church wanted to see the situation resolved and it would not "drag its feet in terms of getting to a good solution".

He said:"There is of course a technical and a legal question that a church can only raise money for charitable purposes and then we have to understand is this legally a charitable purpose?

"There are a number of key questions that need to be answered."

He said the church was waiting "anxiously" for news from the NI Executive regarding a resolution to the PMS issue.

"We have been assured that they are working very hard on this right now and we are waiting for them to complete their negotiations and all their work and then at that stage a request may be forthcoming to us, when that comes then we will repond to it," he added.

The Presbyterian Church has denied any legal ties with the PMS but investors had to be Presbyterians to join.

Chancellor George Osborne confirmed the government would provide £25m in cash and a £175m loan during his Spending Review speech last month.

He said he recognised that savers with the society had suffered for "far too long".

In April, a proposal put forward by the Northern Ireland Executive included plans for the Treasury to provide a loan of £175m.

It was understood that the money would be lent to the administrator who would pay the money back through rental income from PMS properties and eventual asset sales when the market improved.

That plan also included a £50m fund for savers.

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