16 December 2010

Presbyterian Savers 'Saved'

The Stormont Finance Minister has made a budget commitment to the beleaguered Presbyterian Mutual Society (PMS) savers whose cash has been frozen after the organisation went into liquidation.

"I am pleased to announce that this draft Budget contains provision for an assistance package for the PMS savers," said Sammy Wilson, in his wide-ranging speech to the Assembly yesterday.

"This is financed by an additional £175m of borrowing under the Reinvestment and Reform Initiative in 2011-12 and a contribution from the Treasury of £25m which is matched by an equal contribution from this Executive.

"When the proposals are implemented this will put an end to the long nightmare faced by many PMS savers.

That means a £225m lifeline for the collapsed society and represents further progress in getting the required approval from the Executive, Assembly, PMS creditors and the EU.

In February the Treasury Select Committee found the 9,500 PMS savers had been innocent victims of "a fatal regulatory gap" by the Government, resulting in it suffering a run in 2008 and entering administration.

As a result, the UK Chancellor unveiled a £175m loan and £25m contribution to the PMS in October and yesterday Sammy Wilson confirmed that he intended to add this further £25m.

It is believed that he will use a 'sliding scale' across various bands of savers that aims to give 100% back to those with under £20,000 and progressively less to larger savers.

A figure of 84.5p in the pound was been mentioned as a possible return for larger savers/creditors.

Speaking to the Belfast News Letter, the Presbyterian Church spokesman on the crisis, Dr Stafford Carson, welcomed the news: "This announcement that the Executive will contribute £25m, equally matching a contribution from the Treasury, into an assistance package for the Presbyterian Mutual Society savers is to be welcomed," he said.

"His assurance that 'when the proposals are implemented this will put an end to the long nightmare faced by many PMS savers' will be good news for all those that continue to suffer anxiety and despair.

"This is another significant step forward and I would encourage everyone to progress the detailed arrangements as quickly as possible so that a fair and just resolution can be implemented as soon as the financial package can be accessed."

It is thought unlikely that money will reach savers before the May Assembly elections, even though the Treasury's £200m is available from April as EU state aid approval could take six months.

See: PMS Bail-Out 'Softens' £4bn Cut-Backs