Retirement Commissioner Jane Wrightson's office has released a whitepaper on the Retirement Villages Act 2003, its regulations and code of practice. The paper notes a lack of any significant reform in the past 17 years and has recommended wide-sweeping changes to the multi-billion dollar retirement sector. COVID-19 has also cast a spotlight on the sector giving an impetus to take a closer look at the industry as a whole.
With the sector home to an estimated 43,000 residents, The Commission for Financial Capability document recommends more robust protections for this vulnerable population. In part, recommendations include guaranteed retirement unit buyback periods along with improving resale and buyback processes as currently the sale of the units are entirely in the hands of the owner/operators. Where a resident vacates a unit, the recommendation is that there should be time limits on the period for charging ongoing weekly fees.
Though industry bodies claim that there are many inaccuracies in the paper, this discussion is not going to go away. Engagement in the process as residents, families, operators, investors and the broader public look on with interest will drive the conversation and feedback.
The office of Retirement Commissioner Jane Wrightson is seeking public feedback on a discussion paper proposing a review of the retirement village law and regulations. The legislative framework includes the Retirement Villages Act 2003, its Regulations, and the Retirement Villages Code of Practice 2008.
Wrightson said that the intention of this paper is to describe the environment, discuss core issues, and start a conversation between industry, residents and government about if and where change is desirable.
“We have indicated areas that, in the opinion of the CFFC, warrant further work.”
One of Wrightson’s statutory obligations under the Act is to monitor the framework’s effectiveness, ensuring it is fair and balanced for both the industry and consumers. The paper proposes it is timely, effective, and efficient for a policy review of all elements of the framework, to be undertaken by the Ministry for Housing and Urban Development (MHUD), with support from the CFFC. The work would review policy on a range of consumer, framework and business model issues highlighted in the paper and propose changes.
Read the whitepaper here.