Responding to the Wall Street Journal’s recent coverage of several continuing care retirement bankruptcies, LeadingAge President and CEO Katie Smith Sloan wrote a letter to the editor, which was published July 10. Pointing out both the relative rarity of continuing care retirement community (CCRC) bankruptcies (less than 1% since 2020) and the highly idiosyncratic nature of each of the situations examined, Sloan also notes existence of safeguards provided in many state statutes that are intended to promote financial solvency and protect against possible loss. Many CCRCs, she said, voluntarily engage in these and other fiduciary practices.
The full text of the letter is below.
Regarding “Retirees’ Life Savings Can Vanish in Continuing Care Bankruptcies” (WSJ Pro Bankruptcy, June 13): It is important to note that bankruptcies of continuing-care retirement communities (CCRCs) are rare—less than 1% since 2020. Further, these bankruptcies are highly idiosyncratic, with unique circumstances that aren’t endemic to the CCRC model.
While any prospective resident should carefully vet contract terms prior to investing in a CCRC, many robust resident protections exist. Some state regulators provide safeguards that include requiring CCRCs to maintain escrow accounts for entrance fee refunds, debt-service and operating expenses, and to submit to periodic actuarial and in-depth financial reviews, to protect against possible loss. Moreover, many CCRCs voluntarily engage in these and other fiduciary practices.
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