Belfast Telegraph

A minor miracle that put PMS savers back in black

Alf McCreary examines the lessons of the Presbyterian Mutual Society collapse and the financial rescue package

Thousands of savers in the collapsed Presbyterian Mutual Society received all, or most, of their money back by cheque this week, but the lessons of this debacle will linger for a lifetime.

Smaller savers, with less than £20,000 in the fund, received all their money back.

Other individuals and congregations with larger sums at stake received some 85%, but the other 15% will depend on the speed and value of the disposal of PMS properties and other assets.

The return to shareholders is on a sliding scale, which depends on their holdings.

However, the minimum that anyone will receive will be 77% of their total sum.

This could still result in significant interim deficits for larger congregations, including First Portadown, which had £1m in the fund.

Its minister, the former Moderator the Very Reverend Stafford Carson, was one of those senior clerics who played a leading role in the rescue campaign.

The package is a remarkable outcome to some three years of hard lobbying by Presbyterians and also concerted action from the Stormont Executive and the Treasury, which provided a loan of £175m. The Presbyterian Church itself also provided £1m.

Overall, the complex package of loans and government gifts, plus money received by the society on rents and property in the intervening period, totals £232m.

The Enterprise Minister, Arlene Foster, has rightly described the £232m payout as a "significant milestone".

The Secretary of State, Owen Paterson, underlined the stress and worry caused to many people "particularly the elderly, who thought that their savings had gone forever".

It may take a long time for some savers to get all their money back, but one of the good news stories from the mess was the willingness of better-off individuals and congregations to defer part of their returns in order help the less well-off.

This was a good example of mutuality in action, but the Presbyterian Church and the savers have had to learn hard lessons.

One former moderator, the Very Reverend Dr John Dunlop, who was one of the leaders of the rescue campaign, said: "It was a hard struggle and we are grateful for the help from very many people, including the politicians, the Stormont Executive and the lobby groups.

"The PMS was caught up in a financial tropical storm and one of the lessons we all learned was how the society and other financial institutions could be caught up in turbulence that was not of their own making."

At the start, the Presbyterian Church was severely criticised by many savers for appearing to distance itself from the PMS.

The church was technically right to stress that it was a separate legal entity from the society, but it took a long time to mount the comprehensive rearguard action that ultimately proved successful.

The main lesson for the church is not to lend its name to any financial institution, or to commend its work, unless it is familiar about every detail of its operation - particularly at a time of great financial instability.

The church and its controlling general assembly have had their fingers badly burnt and they are unlikely ever again to be so identified with a financial institution over which they have no legal control.

Thousands of savers have also learned the folly of putting their money on the line without reading the small print.

Many looked to the PMS mainly because it was paying good returns, but they were also naive to assume that the Presbyterian Church was in a legal, or financial, position to bale them out in a crisis that developed with frightening swiftness.

No doubt there will be many thankful prayers this week from Presbyterians all over the land for their dramatic rescue.

In today's tough times, it seems nothing short of Divine providence - truly a latter-day financial miracle.


From Belfast Telegraph