<!-- Swiftype Variables -->

DEFINED BENEFIT

Chris Christie formally proposes legislation to use N.J. lottery to pump up pension fund

New Jersey Gov. Chris Christie

New Jersey Gov. Chris Christie on Thursday proposed legislation that would use state lottery funds to help support the $71.6 billion New Jersey Pension Fund, Trenton.

The lottery enterprise contribution project “will substantially improve the solvency of the state's entire retirement system and transform New Jersey's fiscal outlook,” Ford Scudder, the state treasurer, said in a statement Thursday.

Mr. Scudder issued a report on the lottery's projected benefit for pensioners and revealed the state's attorney general's legal opinion that said using lottery money was constitutionally valid. Mr. Scudder also presented a draft bill, which would require a member of the state Senate or General Assembly to introduce it.

The lottery enterprise contribution project will provide approximately $37 billion to the pension fund over 30 years, “while providing an immediate reduction in the state's long-term retiree obligations by $13.535 billion,” the report said. Lottery funds “will significantly reduce pressure on the state budget from ever-increasing pension costs — the chief fiscal burden on the state.”

The pension fund “would receive an asset that should be considered a lower risk than other investment holdings,” the report said. “Independent, outside analysts can reliably assess the lottery enterprise's fair market value and what it will add to the pension portfolio.”

State Attorney General Christopher Porrino said: “Based on our current understanding of the proposed transaction, you are advised that it comports with the state constitution and other applicable state laws,” he wrote in a letter Thursday to Gregory Acquaviva, chief counsel to Mr. Christie.

“Given that this is a novel transaction, and in light of the uncertainties associated with litigation in general, we are unable to say with absolute certainty how a reviewing court would decide a legal challenge to the proposed transaction,” the letter added.