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  • NJ A5003
  • Transfers State Lottery Enterprise to TPAF, PERS, and PFRS.
Introduced
(6/26/2017)
In Committee
(6/26/2017)
Crossed OverPassedSignedDead/Failed/Vetoed
2016-2017 Regular Session
This bill contributes the State Lottery Enterprise to the Teachers' Pension and Annuity Fund (TPAF), the Public Employees' Retirement System (PERS), and the Police and Firemen's Retirement System (PFRS) for a term of 30 years. Under the bill, the TPAF, PERS, and PFRS receive a portion of the proceeds of the Lottery Enterprise, based upon their members' past or present employment in schools and institutions in the State. Under the bill, the entirety of the Lottery Enterprise will be contributed to newly created Common Pension Fund L, but there will be no material change in the operation and management of the Lottery Enterprise. The bill directs that operation of the State lottery remain with the Division of the State Lottery, which will continue in its current form as a division within the Department of the Treasury. The State Lottery Commission will continue to have seven members, but the bill will add the Director of the Division of Investment as a member of the Commission and remove one public member. The State Lottery Commission will continue to exercise regulatory oversight over the State Lottery by adopting lottery rules and approving all games. With the exception of a few retained assets and liabilities (such as annuities purchased to pay previous prize winners), the bill provides that all of the assets and liabilities of the State lottery, including all State lottery intellectual property, will be conveyed, as delineated in a Memorandum of Lottery Contribution required to be executed by this bill, to the retirement systems for the term of the lottery contribution. The intellectual property will continue to be used by the Division of the State Lottery under a no-fee license provision in the bill. The lottery contribution will take effect when the Treasurer delivers the Memorandum of Lottery Contribution to the Director of the Division of Investment. During the term of the lottery contribution, the gross proceeds of the State Lottery will be paid into an operating account within Common Pension Fund L for payment of operational and administrative costs. The Division of the State Lottery will manage the operating account. The bill requires the Division of the State Lottery to transfer into a second account, the investment account, State lottery proceeds net of operating and administrative expenses on a periodic basis. Administrative expenses include prize payments and advertising costs. Consistent with current State law, annual lottery net proceeds must be at least 30 percent of gross proceeds. The net proceeds may be used by each retirement system for payment of benefits to members of the retirement systems or may be invested on behalf of the retirement systems by the Director of the Division of Investment. The lottery contribution given to the retirement systems will increase the funded ratio of such systems with respect to members of the retirement systems who are employed, or were employed, in schools and institutions in this State. The bill allocates the lottery contribution to the retirement systems in allocable percentages. Under this bill, the lottery contribution and all proceeds of the Lottery Enterprise are allocated among the retirement systems in the allocable percentages as follows: 77.78 percent for TPAF; 21.02 percent for PERS; and 1.20 percent for PFRS. The allocations were determined based on (1) the relative percentages of the total actuarial accrued liabilities of the retirement systems; (2) the relative percentages of the total actuarial accrued liabilities of the eligible member portions of such retirement systems; (3) the relative percentages of the total unfunded actuarially accrued liabilities of the retirement systems; (4) the relative percentages of the total unfunded actuarially accrued liabilities of the eligible member portions of such retirement systems; (5) the relative percentages of the total number of members in each retirement system; and (6) the relative percentages of eligible members participating in each such retirement system. The bill provides each retirement system an initial equitable interest in Common Pension Fund L, equal to its allocable percentage of the entire lottery contribution made on its behalf.
2nd Reading in the Assembly, Substituted by another Bill
Substituted by S3312 (1R)  (on 6/29/2017)
 
 

Date Chamber Action Description
6/29/2017 A Substituted by S3312 (1R)
6/26/2017 A Reported out of Assembly Committee, 2nd Reading
6/26/2017 A Introduced, Referred to Assembly Budget Committee
Date Motion Yea Nay Other
Detail 6/26/2017 Assembly Budget Committee: Reported Favorably 13 0 0