Retirement village chief hits back at residents' submissions calling for change

Wilkinson at the Ranfurly village in Mt Eden which his Generus Group owns. Photo / Nick Reed

The boss of New Zealand's retirement village owner/operators' lobby group has hit out at residents' submissions calling for change, saying some are simply wrong while others don't understand the industry.

Graham Wilkinson, Retirement Village Association president, said many of the submissions were based on either incorrect information or people's views simply did not adhere to reality.

"None of this means that I don't think that the position the submitters had were not genuinely held. But it doesn't make them right and there are tens of thousands who think differently," Wilkinson said.

His comments followed a Herald article on Sunday headlined 'Elder abuse' inside retirement villages: Residents air grievances, back law overhaul.

"I am continually approached by residents highly annoyed by these types of stories as they know they are far from reality and that it suggests that they made a silly or bad choice. They find it demeaning," said Wilkinson who is the sole owner of the national Generus Group chain with villages in Auckland, Tauranga and Christchurch.

Retirement village residents aired grievances to the Government authority which has recommended a law change, telling of what one called "elder abuse".

Te Ara Ahunga Ora Retirement Commission received many public but anonymous submissions from residents unhappy with how villages operate.

No capital gain, a substantial power imbalance between residents and owner/operators, lack of a timeframe on when occupation rights have to be bought back after someone dies, lack of transparency on fees and issues transferring from independent living to rest homes and hospitals were some of the central issues.

But Wilkinson said the industry opposed many of the changes being sought and would not budge.

"There are many submissions on capital gain. With respect to the authors of those submissions, I reject this aspect because this is not how the model works. Residents want certainty, not uncertainty with normal or extraordinary costs, e.g. leaky buildings," Wilkinson said.

Because of recent property value rises, the call is louder but markets do not always go up, he said.

"Do they share if values go down?" Wilkinson asked.

If it was so easy, why hasn't someone stolen a march on the other operators and shared the capital gains on properties, he asked.

"Actually, several operators do offer a share or even all of the capital gain, but they are not preferred villages by the market and haven't flourished as they can't give that certainty and/or don't have the level of amenity and care because they have no way of paying for it.

"Another way to say this is there is no free lunch, and while I want business class treatment on an airline at smart saver rates, I understand why no one provides that. It would be inequitable and place various companies at risk and therefore existing residents," he said.

UBS estimated Ryman Healthcare's share price would drop to $5 from a current $13 per share if 50 per cent capital gain was implemented as compulsory. The reclassification of having all this short term liability onto a balance sheet will make most companies insolvent, he said.

Graham Wilkinson hit back at submissions. Photo / Michael Craig

"It cannot be retrospective – for fairness, legal, constitutional and the insolvency it would create. Hence the current residents will not receive anything from it if the Government did change the law to 'outlaw' it. And operators will simply increase their deferred management fees and viola, nothing has changed," Wilkinson said.

It was sad and misleading of any group to champion this cause amongst residents when it would have no effect on them.

"It might get membership numbers up, but it is misleading. The model works, satisfaction rates are high, there is nothing broken but there are a few tensions in the system for a minority of villages and the association can work to eliminate those," he said.

On the complaints systems, he said the sector was happy to work on a refinement of this and is looking to trial an Ombudsman.

"Yet look at the reporting of complaints by operators: typically 80 per cent of residents don't have any complaints, typically 75 per cent are resolved within a short period and to date the number of serious ones are minuscule and I am aware that generally, the issues are not a bad operator but some other issue.

"We have close to 50,000 residents or as I like to say 18 million resident days a year and we have a handful of serious complaints. Find me another industry with that record," Wilkinson said.

Many of the submissions showed confusion about care and related issues around costs, he said.

"A lot of statements that are either simply not true and/or are completely non-typical, e.g. what happens moving to care. There was some comments on stopping fees after exit but around 70 per cent of owners do this already," he said.

"What I noticed was overall there was a lack of serious complaint about a specific issue while living in the village and the major issue was on leaving being the capital gain. There was not actually a lot of specific complain about time to sell, although there was a lot of innuendo about it," he said.

The industry was not perfect yet scored 99 per cent satisfaction the Commission For Financial Capability independent survey and 96 per cent in our UMR independent survey, he said.

"We are keen to resolve any wrinkles, for example operators' chattels interpretation. But the arbiter of all this will not be you, me or the Government. It will be the residents. And currently 100-plus a week are moving to villages," he said.