Diana Clement is a business and personal finance journalist whose work has appeared in many publications, including the New Zealand Herald.

Social Issues

Inside our retirement villages

We’ve all seen the pictures of the carefree silver haired couple enjoying a resort-like lifestyle in a ‘lifestyle village for the active retiree’ but as Diana Clement writes, residents are finding that is not the reality.

The Poynton, like hundreds of retirement villages across New Zealand, makes money by selling licences to occupy independent living units, to retired people. For $670,000 to over $1 million, The Poynton residents get to live in “pure luxury”, “the pinnacle of retirement living”, “unrivalled comfort, security and peace of mind so you can truly enjoy life”.

For many, life is very good in a retirement village. They have friends around them, social activities, live in a safe environment and no longer need to worry about home maintenance.

Lift the lid and the picture starts to look different. Instead of kicking back to enjoy their unrivalled luxury some residents at The Poynton have found themselves in a David and Goliath fight with owner, stock market-listed Metlifecare.

Metlife Poynton Apartments Takapuna. Photo: John Sefton

When retired naval officer Trevor Jones and his wife moved into The Poynton six years ago they loved it so much they agreed to be the face of the retirement village’s advertising in 2014/15 and appeared smiling on huge billboards advertising the Milford complex.

Over time, however, the pair and some of the more able residents including, architect David Gatley, wife Linda, and retired businessman Graham McKenzie began to feel they were living in the “IBIS Budget” of retirement villages, not the “Waldorf Astoria”, the words used by the company to describe what they would get when they signed on the dotted line.

When Metlifecare slipped into regular communications to residents in 2015 and 2016 that the entry age had been raised from 55 to 65 and then 70, the culture of the village began to change. It was the start of a process that found them in a formal dispute with the company.

For those who have never set foot in a retirement village the change in minimum age may seem immaterial. On the ground, however, day-today life for residents changed at The Poynton and other villages where operators had quietly increased minimum ages.

The vibrant mixed age community they had bought into began to feel like a rest home, the very thing that the Joneses chose The Poynton to avoid. The four had chosen a lifestyle village for active retirees, not a facility for people unable to look after themselves independently.

It began to dawn on the Poynton four that there was a real disconnect between retirement village operators, which are big property development companies, and the ageing and sometimes vulnerable people that lived in the villages.

When a group requested at residents committee meetings that the company reverse the decision to increase the minimum age they met a stone wall. They failed at every hurdle through the disputes process and eventually sought a public hearing.

The faster they age the quicker the profit

Metlifecare’s motivation for the change, the Poynton four argued at the hearing, was to compress the number of years before it could re-sell the apartments to realise the profit. McKenzie himself is a Metlifecare shareholder, and says recycled apartments are more profitable at 48 percent compared to new apartments at 36 percent.

Unlike other businesses, the quicker the existing customers die or move on to care facilities, the fatter the profit.

Unlike other businesses, the quicker the existing customers die or move on to care facilities, the fatter the profit. Retirement villages can keep up to 30 percent of residents' capital when they move on. It’s usually 10 percent per year for three years. For an $800,000 unit that can mean giving up $240,000 of the original capital outlay after three years.

If a resident stays ten or 20 years they get more from their 30 percent. The shorter the tenure the lower the cost of refurbishment and the greater the resale profit for the operator.

The company’s chief executive Glen Sowry disagrees with the argument put forward at the hearing that it was done to speed up turnover and says was simply a move in line with other retirement village operators and that the company retains flexibility.

It is not an issue limited to The Poynton. Residents from other Metlifecare villages have been in contact with the Poynton four about the same issue.

At the formal hearing Andrew Peskett general counsel and company secretary of Metlifecare argued that 55 year -olds were never targeted by the company and the average age had changed little, if any.

“So we are not talking about hundreds of 55 to 65 year-olds and now none. We are talking about a very small number of people.”

Peskett complained that The Poynton residents’ claims at the hearing were "spurious" and “inflammatory”.

He said the new age was largely reflective of other retirement village operators including the major listed companies: Ryman, Summerset and Oceania.

Summerset Manukau residents committee complained to the village owner. Then residents committee chair Les Eagleton says the key issue for her and others at the village was the change in culture.

“I have been in the village for 12.5 years and only turned 70 in August. There were a number of residents who came in early because the village was described by the sales team at the time as a ‘lifestyle village’.

“Nothing was ever in writing but that was a selling point for us who were below the retirement age.”

Retirement Villages Residents Association of New Zealand (RVRANZ) president Colin Porter doesn’t buy the argument put forward by village operators that the minimum age increases are immaterial.

His own Arena Living village, the Peninsula Club in Whangaparaoa remains open to new residents from the age of 60.

“Those younger people are very useful in the village to keep the ambience up. They do (voluntary) jobs here. They are on committees. They run group activities.

“If you get a village where everybody is older that is difficult to deal with,” says Porter.

Incontinence, dementia and forced terminations

Kiwis who have no first-hand knowledge of retirement villages are often not aware that residents must pass medical assessments to be accepted into an independent living unit.

Retirement villages are not rest homes offering care, although some have units on site. The public is often not aware that retirement village licences to occupy aren’t for life.

Should residents’ physical or mental health deteriorate to the point where they can no longer pass the medical test their agreement can be terminated. It’s a weekly occurrence across the industry.

In many villages having your licence terminated means having to move to a rest home or hospital care division. At The Poynton, failing the medical test means having to find care elsewhere.

The Poynton four argued at the hearing that as well as the increase in age of entry there had been an unofficial move by the company to quietly ignore its own rules and health standards in order to fill empty serviced apartments.

The Poynton four told the hearing that in 2016 they started to notice the number of mentally and physically impaired residents had begun to rise in their 'lifestyle village' with walkers and wheelchairs clogging up the hallways.

When they began digging, the four and others assisting them worked out that Metlifecare was struggling to fill its inventory and would bend the rules.

The four gave sworn evidence at the hearing that in order to fill the empty apartments management began quietly accepting cognitively (and/or) physically impaired new residents, turning a blind eye to the medical standards required to enter the village or remain as a resident.

The four told the hearing that there was a notable increase in residents who didn’t seem to know where they were and/or couldn’t get around without assistance.

At the hearing they described residents sitting in communal areas staring into space, requiring full-time carers because of physical and/or mental frailty, and of a resident being returned by the police, after wandering.

On other occasions public space seating used by incontinent residents was wet-through with an accompanying smell.

McKenzie, known as a go-to person for residents with issues, says he has experienced dementia impaired residents knocking on his door in the middle of the night, which should never have happened in a lifestyle village with no care unit.

The cultural change become so marked, says Jones, that he began to find it embarrassing to bring family or guests to the village, which had developed what he told the hearing is a “rest home ambience”.

Outside picture of the retirement home. Photo: John Sefton

At the hearing Peskett argued that the medical standards had not been relaxed. Metlifecare’s witnesses refused to confirm how many residents fitted this bill.

The four appreciate that this could one day be them. Their point, however, is it’s not what they thought they were buying into. Jones paid $150,000 more than equivalent units in other villages at the time and signed up for the highest ongoing fees in the country.

“In fact it is what I thought I was avoiding by moving into The Poynton at that time,” he says. “It is like going to buy a Lexus and finding the L stands for Lada a few years later. What would I do? Go back to the company.”

In her written summary, dispute panel member Claudia Elliott noted that the panel preferred the evidence from residents that there had been incidents of distasteful behaviour.

No need to consult with residents

Raising the entry age from 55 to 70 was a fight the Poynton four eventually lost. Elliott noted in her decision that Metlifecare was not required to consult with residents for “policy” changes under the Code of Practice. Metlifecare only had to consult with residents for “rule changes”.

“They have a profit motive and absolutely no consideration for residents whatsoever,” says Jones.

“The company was principally focussed on financial return, or a culture of profit, and the $22 million net profit after tax for just The Poynton Village last year shows they were very successful,” adds Gatley.

The four have not given up their fight for a better deal for residents, but note it is taking a toll on their health at a time in life when they should be enjoying retirement.

“Treated like idiots”.

None of the Poynton four wanted to be in dispute with Metlifecare. They worry that the stress of their situation will kill them, but feel driven to take action for current and future residents both at The Poynton and across New Zealand.

They say the company behaves as if they and other residents are a thorn in its side.

“They treat us like idiots,” says Linda Gatley.

Jones says the four have offered to work with the company, but that Metlifecare is unwilling.

“We are just not sure how to get there if the company keeps its current stance,” he says.

They also point out Elliott’s comment in her written decision that Metlifecare’s approach to the residents at the hearing was: “perhaps unlikely to engender trust for the future relationship between MLC and the applicants”.

The four accept and appreciate that Metlifecare is investing to improve lounges and other shared facilities at The Poynton. This, they say, doesn’t solve the bigger issues of the increase in minimum age, units being sold to residents who are cognitively or physically impaired, and charges for repairs of items such as water heaters that residents haven’t damaged.

Always a percentage of complainers

Graham Wilkinson, president of the Retirement Villages Association, which represents village owners, says the vast majority of residents are satisfied with what they have bought.

He says the residents from villages who complain are a small minority and that like the general population there are always a percentage “that will always find or misunderstand or exaggerate an issue and almost without exception the rest of village residents will not share that view”.

He adds: “I respect that this is sometimes to be expected, and I expect operators to do their best to step up and try to placate and satisfy all residents, but sometimes nothing can or should be done.”

Wilkinson says when villages start the age of those buying in is younger than the average. As the first residents age the village cohort gets older and new residents are often friends of the now ageing original residents.

“This is far more a factor than any imposition by an operator. I have heard 85 yea- olds saying, ‘all the residents are too old here’ without a trace of irony in their voice. I note from the RVA database around a third of operators state 65 years as their minimum, another third state 70 years, and only a small number mostly the heavily care orientated companies, suggest 75 years.

“While village living is great and when designed for the rest of their natural life, it works superbly, if circumstances change and the resident needs to move, then it becomes an expensive option. Those under 70 have a far higher potential for ‘change of circumstances’ than those more senior.”