Page last updated at 18:19 GMT, Tuesday, 13 April 2010 19:19 UK

Church to pay 1m for Presbyterian Mutual bailout

PMS

The Presbyterian Church has agreed to contribute £1m to a hardship fund established by the government as part of a rescue plan for savers.

The church's general assembly met to discuss its part in the bailout of the Presbyterian Mutual Society (PMS).

The rest of the planned £225m bailout loan could come from taxpayers.

Under the plan, the Treasury in London would get any money it lends back with interest. And the big creditors who stood to lose out will also be paid.

The PMS was forced into administration in 2008 after a run on withdrawals when members realised it was not covered by new government deposit guarantees.

Nearly 10,000 Presbyterians lost access to their savings.

Most of the bailout money, £175m, will be a loan from the Treasury. It will transfer the money to the Executive which in turn will lend it to the administrator who will pay off the creditors.

The Executive then hopes to recoup the money when the administrator sells off the PMS when the market recovers.

Finance Minister Sammy Wilson explained why the Executive was intervening on behalf of the PMS savers.

"On most occasions you are intervening for a small group of people affected by an event.

"This happens to be a group of people who were affected by the crisis in the banking system," he said.

Hardship fund

For the smaller investors, it is proposed a hardship fund of £50m will be set up.

About £25m of this will come from the Treasury, with a similar amount coming for the Executive's own budget.

Donations

After Tuesday's special assembly - attended by 800 members - the Presbyterian Church itself has pledged £1m.

Discussions will now turn to how the money is to be raised, but it will probably be through voluntary donations among congregations.

Moderator Dr Stafford Carson, who called the meeting, said it was a chance for the church to show it was not distancing itself from savers who had suffered.

"I think there was a genuine spirit of generosity today and a desire to help those who are in greatest need and to do whatever we can for them," he said.

"It was an opportunity for us to send a message to distressed savers that this church is concerned about them and we're concerned enough to raise £1m."

Dr Carson said while it would be hard to raise the money it was achievable.

"I think there was a sense in the assembly today that this is going to involve some pain but that it's do-able."



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Ministers agree proposal on PMS
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Robinson slams 'shoddy' PMS probe
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Elderly may 'never get PMS money'
19 Mar 10 |  Northern Ireland
Court ruling over society savers
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