Church to pay £1m for Presbyterian Mutual bailout

London, UK - The Presbyterian Church has agreed to contribute £1m to any hardship fund established by the government as part of a rescue plan for savers.

The church's general assembly met to discuss its part in the bailout of the Presbyterian Mutual Society (PMS).

About 800 members of the church attended a special assembly in Belfast on the issue.

The money will be part of a bigger rescue package being considered by the Treasury.

Moderator Dr Stafford Carson, who called the meeting, said it was a chance for the church to show it was not distancing itself from savers who had suffered.

A report in the News Letter suggests the government contribution to the bailout will be £225m.

The PMS was forced into administration in 2008 after a run on withdrawals when members realised it was not covered by new government deposit guarantees.

Nearly 10,000 Presbyterians lost access to their savings.

The special assembly was responding to a recent initiative from the Northern Ireland Executive.

Expectation

The plans drawn up by the Executive would result in everyone getting their money back over a period of time and the Presbyterian Church would have to make a financial contribution to the bailout.

Throughout the crisis the church has been careful to note that it has no legal liability towards PMS investors.

However, a report from Parliament's Treasury Committee in February noted that the PMS was was advertised at the General Assembly, was the subject of pulpit calls and was enthusiastically endorsed by many of the church's ministers.

The committee concluded that the church could not "evade responsibility for what happened, and should consider whether it can help in any way."

Dr Carson said he hoped the £1m could be raised without having to impose a compulsory levy on congregations.

A report in Tuesday's News Letter suggests that taxpayer-funded part of the bailout would involve a £175m loan to the PMS administrator and a £50m contribution to a hardship fund.