NI Presbyterian mutual society, Short of funds for withdrawal?

anotherDonald

This is a bit more hopeful, in today's Newsletter
http://www.newsletter.co.uk/news/PreBudget-review-may-guarantee-PMS.4764851.jp

portwyne

Some people following the thread might be interested to know that the charity Rural Support has agreed to host a meeting (to be held in Loughry College, Cookstown before Christmas) where those who are interested in helping themselves and others can meet to exchange ideas.

The meeting would not be confined to those affected by the PMS but to anyone struggling with the effects of the current economic situation.

Rural Support will speak about signposting to sources of help in cash management and benefit entitlements.

The Samaritans will send one of the Irish Regional Training team to speak on dealing with the emotional impact of hardship, suicide awareness and how to support those going through a crisis or in danger of suicide.

Someone professionally involved with Credit Unions and Industrial and Provident Societies will submit a general explanation of what Administration involves, the kind of solutions at which an Administrator might be looking in a similar situation, and some possible outcomes.

Two other organisations, one specifically Christian, are still considering sending a speaker to explain their services.

The aim of the meeting is to allow people to come to a better understanding of the general situation and to begin to take action on their own behalf and on behalf of others.

The purpose is constructive and the Chair will not permit focus to stray into unproductive criticism of government or institutions.

To register an interest in attending the meeting (details of date and time will then be sent to you) email rs.credit@googlemail.com or telephone Rural Support during office hours only (Mon-Fri 9:30 am to 12:30 pm) on 028 867 60040.

Please note reception can only take a note of your interest - they cannot answer questions about the situation.

joylikes2shop

Any new news/information about the PMS seems scarce at the moment,however hopefully someone might find the following articles more up to date and easy to follow than some of the other 'bloggs' that I've listed previously and which now seem to be going off track a bit !!


City MP awaiting answers on PMS



Published Date: 10 December 2008



The full article contains 235 words and appears in Londonderry Sentinel newspaper.

• Last Updated: 10 December 2008 10:29 AM
• Source: Londonderry Sentinel
• Location: Waterside

Click on the following link to see the above article online.... http://www.londonderrysentinel.co.uk/news/City-MP-awaiting-answers-on.4778491.jp

The following link is for an article in the News letter dated 6th DECEMBER...
http://www.newsletter.co.uk/news/Treasury-response-on-PMS-is.4767883.jp

The next link also makes reference to the PMS....
http://www.irishtimes.com/newspaper/ireland/2008/1208/1228571630089.html

joylikes2shop

Appeal to Treasury over PMS funding



Last Updated: 12 December 2008 9:09 PM

• Source: News Letter
• Location: Belfast

The article above can be seen at the following web page ..... http://www.newsletter.co.uk/news/Appeal-to-Treasury-over-PMS.4790520.jp

anotherDonald

I think Joy's story above refers to the family charitable trust in the story below, in the Newsletter on 27th Nov, link below

http://www.newsletter.co.uk/news/Church-fund-crisis-halts-pastor39s.4736123.jp

Church fund crisis halts pastor's work in Uganda



Pastor Ernest Howie and his wife Thelma in Uganda
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Published Date: 27 November 2008
THE Presbyterian Church last night said that some congregations are considering moves to help the Presbyterian Mutual Society (PMS) following an appeal from a Christian charity whose work in Uganda has been halted because its money is in the PMS.
Pastor Ernest Howie's Abundant Life International Ministries has £600,000 in the PMS and has been forced to postpone a contract to build a 500-student school in Africa because its money is frozen in the society.

The PMS suspended withdrawals after there was a run on the fund.

Pastor Howie, from Coleraine, said that even though there was no legal obligation on the Presbyterian Church to help those who have money in the PMS, he said that he "believed there were steps that the Church could take" to help, such as offering to pay back loans from the PMS and taking loans from mainstream banks instead.

Responding to Pastor Howie's appeal last night, a spokesman for the Presbyterian Church said: "That idea has been mentioned and we are aware that some congregations are considering it."

Pastor Howie said that vital aid work to sink boreholes and build schools in Uganda had been halted by the financial turmoil.

"We are involved in trying to build churches, to build schools, to sink boreholes for clean water in rural areas and all of this requires us to have access to the funds that are in the Presbyter-ian Mutual Society," he said.

"We are due to go Uganda on Saturday to sign a contract to commence some construction work which will give much-needed employment to very many poor people in Uganda and we are not now able to proceed with that work until the money in the mutual society is made available to us again."

And he called on local politicians to increase pressure on the Government to extend the Financial Services Authority's guarantee scheme to the society.

He said: "The big problem is that the run on the Presbyterian Mutual Society was caused by the guarantee that the British Government gave to banks so investors in the mutual society quickly withdrew funds and created an unhealthy financial situation in the mutual society.

"I must say that it looks like a form of discrimination when the Government has guaranteed Icelandic banks' deposits, yet won't guarantee a 100 per cent British financial institution."

The administrator running the PMS has told members that their money will not be touched until they have a chance to vote on how the society should proceed.

The administrator is expected to write to members by January, laying out recommendations on how the current crisis should be addressed.

dobefan

I was wondering if this route might help ...

http://www.fscs.org.uk/

Cheers

joylikes2shop

Cleric's fury over collapse of society

Published Date: 19 December 2008 (see following link for origional article....http://www.newsletter.co.uk/news/Cleric39s-fury-over-collapse-of.4808183.jp )

leftieM

jon_groovy wrote: »

Lets not forget, the PMS is only in trouble for one reason, and one reason only, and that is because of the people who withdrew all their money and putting their faith in the government over the church.
Name and shame the people who bought the PMS down

The reason the 'run' caused them to close their doors is because they had so little cash in reserve.
Their business model of lending was based on ever rising house and land prices and ever solvent developers. It was a business model that was always fundamentally flawed because it wasn't investing money, it was gambling with it.

anotherDonald

From The Sunday Times
December 28, 2008
Liam Clarke: Churchmen, do your duty by investors
The Presbyterian church is being urged to help members who invested money in a struggling mutual society it recommended
Liam Clarke
There is growing pressure on the Presbyterian Church in Ireland to intervene to help protect investments in the Presbyterian Mutual Society (PMS) made by its members on the recommendation of their church.
There was a run on the PMS, which claims assets of £300m (€322m) and makes low-interest loans to church bodies, after the British government underwrote bank deposits to prevent a collapse of the financial system. PMS cash reserves drained away as savers switched to banks covered by the Financial Services Authority (FSA).
Last month special legislation was rushed through Stormont placing the PMS in administration, a device that suspends trading and prevents lawsuits while a specialist tries to sort out the mess. The church has asked the British government to include the PMS in the FSA scheme, and the application has been supported by politicians in all parties. However, the Presbyterian church has so far ruled out using its own resources to restore confidence or to offer any guarantees to its members.
Only Presbyterians can save with the PMS and some fear that its handling of the issue could split a church which, with 300,000 members, is the largest Protestant denomination in Northern Ireland and the second largest in the republic. There have been demands for a recall of the church’s ruling general assembly to discuss the crisis.
Margaret Morrison, 85, a widow from Ballymoney, is typical of the small investors whose finances were left in chaos after she followed her church’s advice in making an “ethical” investment in the PMS. She had her money safely in a bank until a clergyman suggested the society would be a good place for her savings. “He told me, ‘I don’t want to be interfering in your affairs, but it would be wise to invest in the Presbyterian Mutual.’ Before that, I had never even heard of it,” she said.
Last October the Presbyterian Herald, the church’s newspaper, carried an advertisement for the PMS on its back page. In June the general assembly unanimously passed a motion encouraging “congregations and individuals to avail themselves of [the PMS's] service”.
There were even stronger endorsements in previous years. In 1992, for instance, the church’s home board told the general assembly that the PMS was “widely recognised as an excellent and safe source of investment”.
Until the administrator was called in, the Presbyterian church’s website explicitly endorsed the scheme. “The PMS was established in 1982 to encourage Presbyterians to save through their own church and manage such savings for their mutual benefit to enable shareholders to borrow at a competitive rate of interest,” it said. The PMS offered a “categorical assurance” that it would not speculate with members’ money and promised easy withdrawals with 21 days’ notice.
Last month the 9,500 Presbyterians who accepted such assurances received a letter from the administrator telling them their money could not be withdrawn until a review is completed, probably in mid-January.
“At my age, unless I get it pretty soon, what good is it going to be?” Morrison said. “Luckily not all my money is in there, but I have a friend who has every halfpenny in it and who can’t get it out for Christmas.”
The Rev Alan Mitchell, a Presbyterian minister in Sligo who has invested in the PMS, knows of cases of real hardship, including a small business owner who had deposited money to cover tax liabilities. Sir Reg Empey, the Ulster Unionist leader and himself a Presbyterian, says he was contacted “in desperation by a party colleague who had sunk every penny into the PMS”. In September, just as the run was starting, the man had placed a substantial sum in what he thought was an instant-access account.
Mark Durkan, the SDLP leader, has been approached by a charity that builds schools in Uganda that has had to halt work after £630,000 was frozen in the PMS.
It may get even worse. “The administrator cannot at this stage form an opinion as to whether members’ money can be returned to them in full or what proportion of their funds can be returned,” the Presbyterian church’s website says.
In the Presbyterian Herald, the Rev Dr Alan Russell, a senior minister and former convenor of the church’s ethics committee, highlights the potential damage to the image of Presbyterianism. “The general public will conclude that Presbyterians are just as greedy, insecure, opportunistic, selfish and me-first as anybody in the community . . . We’ll wince with embarrassment as the world dismisses us as hypocrites,” he writes.
Russell criticised those who moved funds out of the PMS and into the banking system. But Morrison, Mitchell and other small investors were struck by the way in which church officials rejected any suggestion of financial responsibility. The Rev Donald Watts, the church’s most senior administrator, has promised pastoral advice to those in hardship but added: “It is clear that the church cannot underwrite the commitments of the society.”
Morrison is among those who have received pastoral support. “My clergyman said it was a pity that they had the word Presbyterian on it because it wasn’t part of the church, but I always thought it was under the wing of the Presbyterian church,” she said.
There are proposals now for the government to bring the PMS under the regulation of the UK’s FSA in return for a payment from the Stormont Department of Enterprise, Trade and Investment, which is headed by Empey. He and Durkan have been lobbying Whitehall.
Such a change would give PMS investments the same protection as UK bank deposits. However, the FSA may not value the society’s assets at the full £300m, so investors may only get a proportion of their money back.
So is there really nothing the church can do apart from giving pastoral advice to those left out of pocket? Church sources claim there is a general investment fund worth £43m and an estimated £20m in other reserves that could be brought into play. According to Arthur Boyd, the administrator, loans to church congregations and members amount to about £170m. Some of these borrowings by church bodies could be refinanced and repaid to help restore liquidity. The church has other assets — a site in Lucan, near Dublin, is valued at between £4m and £6m.
Some responsibility must be taken by the board and management of PMS who, despite being lauded by the general assembly, failed to secure guarantees for depositors either through the government’s programme or through an insurance-based scheme, as credit unions have done.
Another blunder was the decision to offer easy withdrawal to investors, but not to keep enough liquid assets to meet a fairly predictable level of demand. Some £130m of PMS funds are sunk into commercial property in Scotland and England, which is now falling in value and — unlike bonds or gilts — cannot be sold on demand.
Church sources say the PMS also left itself vulnerable by depleting its cash reserves from £42m two years ago to £4m this year.
Empey believes the church must do what it can to protect its members’ savings. “Legally the church may be off the hook, but ethically I don’t think it is,” he said. “The PMS is chaired by a Presbyterian minister; there are five ministers on the board; only Presbyterians can put money in and only Presbyterians can take money out. So there is a clear moral obligation here and I don't think the church can pass by on the other side.”

loganjh

I think it would be really interesting to find out how many of the 'Directors' still have any money invested and the pattern of their withdrawals over the last couple of months.