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PMS update

November 10th, 2010

There was some discussion of the PMS crisis at the Assembly this week. Here’s what was said:

4. Mr Storey asked the Minister of Finance and Personnel to outline the likely timescale for resolving the issues surrounding the Presbyterian Mutual Society.  (AQO 460/11)

The Minister of Finance and Personnel  (Mr S Wilson): The spending review, which was announced on 20 October, confirmed that the Government’s contribution to the proposed Presbyterian Mutual Society (PMS) solution will be available in the 2011-12 financial year. However, a number of local and EU agreements are required before payments can be made. Executive and Assembly agreement to the overall package can be secured as part of the Budget process. The Department of Enterprise, Trade and Investment (DETI) will take the lead on the Assembly legislation necessary to seek EU state aid approval for the loan. I hope that that work will be progressed as quickly as possible. We are working towards resolving all the issues for the 2011-12 Budget. However, I remind Members that any delay in establishing and agreeing the Budget will have a knock-on impact on the PMS solution.

Mr Storey: I thank the Minister for his answer about an issue that is of grave concern to a considerable number of people in Northern Ireland. One of the outstanding matters is that of small investors. Will the Minister outline today what further steps can be taken to ensure that those investors get 100% of their moneys back?

The Minister of Finance and Personnel: A lot of the Assembly’s attention has been focused on the small investors, who make up around 66% of those who have money in the PMS. Although we want to try to ensure that as much money goes back to all the investors as quickly as possible, most of the Members who have raised the issue in the Assembly have been particularly concerned about the small investors. What can be done to ensure that those investors get all their money back as quickly as possible? Obviously, the bigger the mutual access fund, the more money there will be to give to small investors. The Government at Westminster have put up £25 million, as have the Executive, and the Church has committed £1 million. Obviously, if the Church could provide additional money to increase that mutual access fund, there would be an ability to give much greater sums of money back to small investors.

Mr O’Loan: I am very keen that a fair solution be found for PMS savers, particularly, small personal savers, as the Minister and the Member who asked the question said, and long-term savers with the society. Nonetheless, does the Minister agree that the solution must be proper, fair and proportionate to all members of the community whom we serve and that it must reflect the Assembly and the Executive’s position vis-à-vis that of the Treasury? Does he also agree that there have to be concerns about what is in the public arena on the potential risk to the Assembly, the Executive and their future finances?

The Minister of Finance and Personnel: From the question, I am not too sure whether the Member is supportive of sorting out the PMS issue or whether he is actually trying to throw objections into the pot. Maybe we will get some clarification about that from his party at some stage. On the one hand, it appears publicly to support the savers, but, on the other hand, it seems — by the tone and nature of that question— to raise some doubt about whether that should be done.

I assure the Assembly that we have gone through a long process with the Treasury. It has looked closely at the figures for the liabilities, the value of the assets and what is likely to be raised from those assets over a 10-year period. The indications are that the £175 million loan that we will take out, which will not impact on the capital programme for the Assembly as it will be over and above what we have been allowed to raise through loans for capital projects, will be not only serviced but paid back. From the surplus, we will be able to reimburse the money that will be put up for the mutual access fund. That is the intention. The quicker the property market picks up, the quicker that money can be paid back. It is on that basis that we have proceeded.

Since it was a question asked by a DUP member to a DUP Minister, it is clear that the Minister wanted to say something. I believe he is making three points:
1. So long as the Assembly delays in arriving at an agreed budget, the resolution of the PMS situation will be delayed.
2. The more money the church contributes to the Mutual Access Fund, the more there will be for smaller savers. The General Assembly has pledged £1 million and has, as yet, not been asked to increase its contribution.
3. The Northern Ireland Executive is not making a gift of £25 million to the rescue package but are planning to have any contribution to the Mutual Access Fund reimbursed to them.
These issues will undoubtedly cause some debate and discussion among PMS savers. There is so much to be said, but most savers are hoping that soon all the hurdles will be surmounted and a resolution will be arrived at. The pain and anxiety has gone on far too long.
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