PMS update

newsnormal12The Minister for Enterprise, Trade and Investment, Arlene Foster, has published a helpful article in today’s Belfast Newsletter which outlines the road map for the next few months in getting towards a final resolution of the PMS crisis. This will reassure savers that progress is being made and that the issue is receiving good attention from DETI.

Along with other church representatives, I met with the Minister yesterday, and we had a good meeting as we reviewed progress and discussed what the next steps would be in bringing this saga to a good conclusion.

This is the third Christmas since the PMS crisis and, as the Minister observes, procuring the solution has taken a lot longer than we imagined. But the signs are hopeful. Here is the full text of Arlene’s article.

I am acutely aware of the difficulties experienced by many members and creditors of the Presbyterian Mutual Society (PMS) over the past two years. Through many meetings and correspondence, I have heard first-hand of the wide range of problems that have arisen for those who have not been able to gain access to their money.

Over this period the First Minister, Peter Robinson, the Finance Minister, Sammy Wilson, and I have worked tirelessly on this issue. Although we would all have wanted this resolved much sooner, there has been very significant progress in working to achieve an acceptable resolution.

Following an approach from the directors of the society in November 2008 outlining the serious financial difficulties, I responded quickly to enact the necessary legislation allowing the society to go into administration in order to protect members’ funds.

If it hadn’t been for the fast action to amend this legislation, the PMS would undoubtedly have gone into liquidation, and there would have been a poor return for creditors and nothing for members.

Since then the executive, working alongside a number of other important key stakeholders and influencers, has been focused on finding a remedy to the PMS problem. It has however been a complex matter and there are still a number of challenging issues to resolve.

Excellent progress was made by the Ministerial Working Group in identifying the options for dealing with the situation and bringing forward proposals which were accepted by the coalition government. We are now working towards resolving all remaining issues, which will clear the way for implementing the proposed solution in the 2011-2012 financial year.

As readers know, the Chancellor of the Exchequer in his statement to Parliament on the government’s Spending Review confirmed that support would be made available to the Executive to assist PMS members and creditors. This was a major achievement, and last week, the Finance Minister Sammy Wilson confirmed that the Northern Ireland Executive’s agreed draft Budget contains provision for an assistance package for the PMS. This was another significant milestone, and it will be financed by an additional £175 million of borrowing under the Reinvestment and Reform Initiative in 2011-2012.

An additional allocation from the Treasury of £25million, matched by an equal contribution from the Executive, and a contribution of at least £1 million from the Presbyterian Church in Ireland, will form a Mutual Access Fund to give members early access to their funds.

Over the coming weeks, we will be working with the PMS Administrator to finalise the technical details of this fund to ensure that it is apportioned equitably, and that this process does not take a day longer than necessary. It is my desire that those members with less than £20,000 receive almost all of their money back.

A number of local and EU agreements are also required to allow payments to be made. Implementation of the overall solution requires the Executive and Assembly to agree and pass new legislation; EU State Aid approval is needed for the loan scheme; and a Scheme of Arrangement incorporating the Executive’s proposals has to be prepared by the administrator.

Precise timings will become clearer as we work through the State Aid approval process. This process has already begun, as this week my Department forwarded a pre-notification of the Executive’s loan proposal for State Aid approval to the UK Department for Business, Innovation and Skills.

It was not possible to do this any sooner as agreement on the draft Budget was first required, and it will only be possible to make payments under this scheme when it has been approved by the European Commission. This will take a number of months.

Once the detail of the support package and its related terms and conditions has been finalised, it will be presented by the Administrator first to the court and, subject to its agreement, then to all PMS members and creditors as part of a Scheme of Arrangement.

If the Scheme of Arrangement is accepted, and the Executive’s loan approved by the European Commission, my Department will be able to formally release funding to the administrator and payments to members and creditors will then commence.

PMS members and creditors have been incredibly patient. Although the government and Executive funding will not be available until the new financial year beginning next April, you may be assured that I will continue to do all that I can to hasten a satisfactory outcome and that it will be completed as soon as practically possible.