Deferred Management Fee Hurts Retirees

Deferred Management Fee Hurts Retirees - The major problem with the DMF model is that it was created decades ago for charities and not-for-profit organisations.

Today in the modern business world the ingoing $ amount required to enter a retirement village is typically commensurate with similar properties within the general community. The result is that 2017 retirees are now in general terms paying entry and operating costs as if an owner, but without the security of ownership and without any of the ownership benefits.

Table 5a and 5b clearly show the detriment to retirees and the benefit to retirement village operators as the ingoing amount for retirement villages moves closer to 100% of a commensurate property within the general community. The use of the Deferred Management Fee model in these circumstances simply accelerates the transfer of capital wealth from retirees to private enterprise.

As retirement village entry costs get closer to commensurate properties generally,

the greater the Deferred Management Fee model fails Australian retirees.

Table 5a

Table 5b

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