A/HRC/45/14/Add.2 46. Around one third of the retirement villages are run by five big operators. Non-profit providers make up less than a quarter of the industry. Their share of the market is expected to decline as bigger players continue to expand. 47. Residents sign a contract, called an Occupation Right Agreement, which offers the right to live in a unit but without any ownership rights. In addition to the sum paid for the occupation licence, a weekly fee is usually required to cover the village operating costs. The average is around NZ$ 124. 48. The rationale of the profit projections relies on income from selling a licence to occupy for the same unit several times within a relatively short period. The average tenure of villas is seven to eight years, while it is five years for apartments. The shorter the tenure, the lower the cost of refurbishment and the greater the resale profit for the operator. 49. When older persons leave the village, the operator usually retains a sizeable part of the initial payment as a deferred management fee. Bigger operators charge a maximum deferred management fee of 20 to 30 per cent. In most cases, the village also keeps any capital gain from reselling the unit, and some providers hold older persons liable for any capital loss. Depending on the terms of agreement, further fees could be incurred, such as meeting the operators’ legal costs when the unit is resold and administration fees to cover its marketing expenses. 50. Other concerns include unexpected fee increases, reductions in village services, inappropriate management of sales, and lack of consultation. While the Act establishes a formal dispute resolution process, it seems to be too adversarial, hence cumbersome, and residents are reluctant to complain, including because they can have costs awarded against them if their case fails. 51. In general, residents must pass medical assessments to be accepted into a retirement village. When an older person’s physical or mental health deteriorates to the point where he or she can no longer pass the medical test, the agreement can be terminated and the person has to move to a rest home or hospital care division. 52. More than 70 per cent of retirement villages now have care facilities on site, and more than 50 per cent of the total number of beds in facilities that provide care for older persons are in retirement villages. However, the independent living part of a village and its care facility operate under different regulatory regimes and different cost structures. The process for moving into care support facilities can be complex, and the resident may face extra charges. 53. New Zealand is a nation prone to major earthquakes, with thousands of earthquakes occurring every year. Experience from the series of large earthquakes in 2010 and 2011, in Christchurch and the wider Canterbury region, confirms that older persons are disproportionately affected by natural disasters owing to their reduced mobility, dependence and physical, emotional or mental condition, and lack of transport and local services, including the disruption of care support services. Some retirement villages, for example, were totally destroyed, with older persons facing unforeseen difficulties over occupation rights agreements. 37 More than 300 older persons have been moved from earthquake-damaged residential care centres in Christchurch to other regions or to undamaged facilities within Christchurch. E. Social protection and the rights to social security and work 54. New Zealand has a comprehensive State-funded pension system, the New Zealand Superannuation, which is under the responsibility of the Ministry of Social Development. 55. Every New Zealander is eligible for Superannuation on reaching the age of 65, provided the residency criteria are met, in particular 10 years of residency since the age of 20. Superannuation is not income or asset tested and older persons may continue to be in 37 10 Judith A. Davey and Jenny Neale, Earthquake Preparedness in an Ageing Society: Learning from the experience of the Canterbury Earthquakes, Report prepared for the Earthquake Commission, (Victoria University of Wellington, 2013), p. 6.