PMS Savers Get Summer Pay-out Offer

There has been a broad welcome for news that the administrator of the Presbyterian Mutual Society (PMS) has proposed a 'Scheme of Arrangement' to the 10,000 creditors and members for them to get a total of more than £232m by early July.

As the Election looms in four weeks time, DUP Assembly candidate and outgoing Minister for Enterprise, Trade and Investment, Arlene Foster, (pictured) welcomed the long-awaited move - announced today.

"I welcome the Scheme of Arrangement," she said, noting that she originally used insolvency legislation to allow for the society to be placed in to administration rather than forced liquidation.

"This bought us the necessary time to put these arrangements in place.

"It has been a slow and at times difficult path since November 2008, but I am pleased that the administrator has confirmed that the first cheques should begin arriving in July.

"I am especially pleased that the scheme has been constructed in such a way as to guarantee that small savers (those with savings of less than £20,000) will receive as a minimum 97% of their money back.

"I believe that the small savers will receive all of their money during the initial payments. Had we proceeded to immediate liquidation, the figure would have been zero," she explained, noting that it has taken just over two years to sort this problem.

"I hope we are finally nearing the end of the road of this difficult situation," said Mrs. Foster.

Ulster Unionist, Danny Kinahan has also responded: "What fantastic news to hear that the Presbyterian Mutual Society has had an offer so soon.

"When Lord Empey (Sir Reg) started fighting this battle it seemed a very long way off and just over a month ago it appeared that a European decision would take ages and the 'misfiring Executive' at Stormont might take longer," said the outgoing MLA.

"Lord Empey led the charge right from the start and eventually all the parties joined in and for once worked together," he enthused.

Alliance Representative Chris Lyttle, who has been working to help Presbyterian Mutual Savers, said he hopes that the package to help investors will help everyone get as much of their savings back as possible.

"I sincerely hope that this package will deliver as much money as possible back to all the savers who have had to wait an inordinate period of time to get access to their money.

"This has been a very challenging time for savers, and the difficult situation they have faced has been made all the more difficult by the tough economic times we currently live in and rising living costs," he said.

The PMS was placed in administration in November 2008 to protect its assets and enable the Administrator to seek a better return than would be possible through liquidation.

Since then, those with loan capital - who are classed as creditors - received 12% of their money back.

However, because of the way insolvency law operates, nothing was payable to shareholders (known as members).

The Administrator has developed the new scheme in order to pay out the £225m in financial assistance provided by the government, as well as £1m from by the Presbyterian Church in Ireland.

A further sum of over £6m has been made available from the income accrued by the Society during Administration, making the total proposed payout in excess of £232m.

However, if the scheme is rejected the offer of money from the UK Government and the Presbyterian Church will be withdrawn and the alternative will be liquidation and the estimated return from liquidation would be 72% to creditors and nothing to members.

In a letter to savers, the Administrator has said: "The details of the Scheme of Arrangement follow the principle of fairness that underlies the rescue package provided by the government, in that those with greater amounts in the Society should receive proportionally less in order to ensure that the so-called small savers receive all or nearly all of what they are owed."

See: Rescue Package For PMS Savers On Way

(BMcC/GK)