Presbyterians debate PMS

The PMS debacle continues to create problems within the Presbyterian Church. At the general assembly there was a proposal that ministers donate £1,500 each to help kick start a £1 million hardship fund for the PMS savers. The minutes of the meeting drily note that the proposal was withdrawn “By leave of the House” and instead the following was passed 274 for: 164 against.

That the General Assembly authorise the General Board when and if appropriate to ask ministers to contribute voluntarily what they judge they can afford to give a lead in raising the promised contribution agreed at the Special Assembly.

Afterwards the Rev Tony Davidson from Armagh said:

“I agree totally with what the outgoing moderator (the Rev Dr Stafford Carson] said on Wednesday, that we should all be generous and positive in this crisis and stand with savers

The majority of ministers and elders did get that right in the vote (274), that is how Presbyterianism works. And obviously we were happy that at the end of that vote everyone agreed they would follow that resolution.

In the end all the house adopted that resolution (to give voluntarily to a hardship fund) and I think we will be happy to live with it. Nobody dissented. The atmosphere in the house was to be supportive of all savers.”

The outgoing moderator Stafford Carson stated:

“And we are encouraged that secretary of state Owen Paterson has taken a very active interest in the PMS before he came to power and that he has now promised to consider a bank takeover as a real option.

That would do away with the false distinction between smaller and larger PMS savers that has been at the root of so much of the trouble in resolving this crisis and has created the potential need for a hardship fund.”

Carson may feel that the distinction between the smaller and larger savers is false and he has previously admitted that the real, but unfortunately minimised to the savers, distinction between the Presbyterian Mutual Society and the Presbyterian Church was inappropriately used when the crisis broke. (To quote one saver after the April special assembly to discuss the issue) “The Church dismissed us at the start of this crisis…”

However, Carson and the church have stuck doggedly to avoiding major investment to help the savers and Carson has been disingenuous over the Presbyterian Church’s assets. Of course the £42 million in the central investment portfolio has never been mentioned by the church.

A comment from the Newsletter’s special assembly report in April is telling: “There was no admission of any wrongdoing or negligence by the Church in how the crisis came about.”

After the latest debate Mervyn Redmond, a member of a PMS savers’ self help group said :

“The whole PMS affair is hurting the church very badly. It would have been encouraging to know that ministers were trying to show a wee bit of Christianity. If they had taken a different stance (during the vote) I would have considered it very differently.”

One day this crisis will be over either because the government will bail out the PMS, it will be sold to a bank, or because it will be forgotten about and the small savers (most of them old) will have died. However, the damage to the Presbyterian Church will be measured in far more than the money they have saved by minimising their giving to the PMS savers.

He hath shewed thee, O man, what is good; and what doth the LORD require of thee, but to do justly, and to love mercy, and to walk humbly with thy God? (Micah 6:8)

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  • Ulick

    Out of curiosity is there a deliberate ploy in some parts to call these people “savers” instead of the more accurate “investors”?

  • drumlins rock

    its because they are savers not investors, in exactly the same way a Credit Unions members are savers despit their saving being called shares as well. The difference is when you “save” £100 your capital always remains £100, but with some reward in the form of interest. With an Investment you expect your £100 to increase to £120, £150 £200 over the years, plus often recieve a reward. The “shares” & “loans” to the PMS both fall into the first category.

  • fp veritas

    Please explain the difference in a “saver” and an
    “Investor”

  • Ulick,
    That is a very interesting question and goes to the heart of the issue. They were indeed investors. However, the PMS was pushed as a savings scheme and the Presbyterian Church pushed it as such for many years. It was always suggested it was like a building society. In reality it was not, was operating illegally (though the persons in charge who were operating the system illegally have not been held to account) and when it folded it was clear that the savers were not savers but investors. Hence, they were not covered in the same way as normal savers in banks / building societies.

    My fundamental issue with the Church is that it suggested that this was a savings scheme and constantly promoted it. Then when the whole thing collapsed the Church ran away from all responsibility. Now it is accepting that it should help a little: whereas I argue it should help a great deal, is acting very wrongly by not doing so and individual senior ministers have acted and continue to act in a dishonest fashion over the whole affair.

  • Danny

    Savers put their money into a bank or other such institution backed up by financial regulators, governments, etc. These people from what I gather bought shares in a company backed up by little more than myth and legend.

  • Danny

    Just because you expect it to happen doesn’t mean it should. They were conned into a bad investment, and that’s it. Madoff’s victims aren’t gonna get much help either. It’s the choice they made, and now they have to live with it.

  • drumlins rock

    The financial regulations only kick in at a certain level, hence Credit Unions and other small saving schemes are not backed, and remember neither were banks at the start that only came later with the near collaspe of Northern Rock.
    The PMS is not a ordinary company but is a mutual and was governed by different legislation, regulated by DED, but its savings reached a level where it should have come under the FSA, and where it would have been properly covered, the PMS failed to realise this, as did the DED as did the FSA.
    Almost certainly if it had of been refered to the FSA several yrs ago it would have been treated the same as a bank and the savingsproected, however more stingent rule may have been put in place and it lending and investment practices curtailed.

  • joeCanuck

    I agree that legally these people were investors but many, if not all, thought that they were savers.
    I have a feeling that the people running it were out of their depth and possibly stupid to boot.

  • dodrade

    It seems to me that in the General Assembly there are too many Pilates and not enough Good Samaritans.

  • Mutuo

    Why does the Church not put the blame where it belongs on the Government department that registered a financial co-operative society that was expressly prohibited by its own legislation. All the problems came from that failure and PMS was a ticking time bomb from the day it was registered. If only the Presbyterians had affiliated to the Co-op Union they would have been warned of the danger they were in.

  • Rory Carr

    I suppose the best way here is to lead by Christian example. In that spirit I would expect those of a Christian mien (and particularly those “People of the Book”) to be amomg the first to subscribe in helping their fellow Christians in distress.

    Wouldn’t you agree, Turgon?

  • Comrade Stalin

    The key difference being that Madoff wasn’t a clergyman using his authority to recommend that people “save” (not “invest”) in his investment product. I think Turgon is absolutely right here. The Presbyterian church authorities are running away from a mess they helped to create.

  • Savers, Investors, Gamblers, Losers …… take your pick. All are appropriate.

  • Belfastconfetti

    The PMS paid high interest rates and that’s why people invested in it, not because the General Assembly pushed it. No one pays any attention to the GA on any other matter, do they?

    The fact is that the investors are in the same position as people who bought shares in Marconi or Northern Rock a few years ago: they took a punt and the company failed. It would be nice if the Government chose to bail them out, but I won’t be holding my breath.

    The losses that lots of people are facing isn’t the result of a con trick that PCI played on OAPs for sinister reasons. It is just an all round disaster brought on by misplaced trust in a badly run mutual.

    As to the people who dragged this up in the GA, people who could easily afford to quietly contribute but instead chose to wash their clean linen in public, well, they have their reward. Ain’t they pure.

  • Danny

    Yes but it’s the peoples fault for getting sucked into it. Surely alarm bells should have been ringing when some shifty characters who openly believe they are being controlled from space by some Jim Henson-esque puppeteer starting looking to take control of all their cash. If some guy ranting and raving about absolute nonense on the street offered to “save” my cash for me, and I obliged, I’d be laughed off if I tried to get everyone else to pay me back. Why is this any different?

  • Ultonian

    Ultimately, some individuals put their money into the PMS on bad advice, from those not qualified to give financial advice. The interest rates were good and because of the name, many (wrongly) believed that it was backed by the church and some still think it should be backed by the church!

    Ultimately the PMS was a mutual investment society, it was run by a group of well intentioned amateurs and when the world financial buble burst the PMS hit the rocks – hard, but not just that.

    The real story still lies with those who took their money and ran in the last 3/4 weeks of the PMS’s life – some might say the more shrewd investors who knew what was going on and took thier money before the collapse. From this it is clear there were some real investors who did well out of the PMS but took the money and ran at the first sign of problems!

    As for the governmet’s response as expected, since its across the pond Brown and co filled our MPs and other worthies with great promises and no delivery