The pension fund for state of Florida, county, school boards, and other government workers earned a robust 8.9 percent return on investments and is stable, but the numbers suggest problems may be on the horizon.

A 204-page audit report released by the Auditor General’s office Thursday found the Florida Retirement System ended the 2018 fiscal year with $161 billion – a 5 percent increase over the previous year.

The FRS manages the retirement fund for more than 415,000 retirees and 643,000 current workers. The key to understanding the health of a pension plan is a figure called unfunded liability. It is the percentage of what a pension plan expects to need to pay its retirees, and the cash and other assets it has on hand.

At 100 percent-funded plan has exactly what is needed if all its members retired right now. The FRS was last fully funded in 2008, but a collapse in the real estate market and the Great Recession created a shortfall and now the fund is around 84 percent funded, according to figures released by the Florida Department of Management Services.

Investments accounted for 75 percent of FRS’s 2018 income of $18 billion. Government employers contributed 18 percent and workers added another 4 percent of the total. Looking ahead, the fund’s managers and auditors disagree on the expected rate of return in 2019.

Managers expect a return of 7.4 percent while the auditors say 7 percent is a more reasonable expectation. Both figures are less than what the investments earned the past two years.

Still, not all the numbers are rosy for the FRS. The number of people vested in the fund now surpasses the number contributing to it. Retirees, their dependents, workers in a deferred retirement plan and other members who no longer work for a contributing agency surpassed active members in 2015 and continue to grow.

That, along with an unfunded liability, which has nearly doubled to $29 billion since 2009, creates some structural challenges for the fourth largest public pension fund in the nation.

Reporter James Call can be reached at jcall@tallahassee.com.