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Retirement fund deficit up $1.9-billion

The deficit in the state's retirement fund has grown by $1.9-billion in the past two years to reach a total of $15.9-billion.

The debt is the difference between what the Florida Retirement System has and what it is obligated to pay out. It has about $23.4-billion in stocks, bonds and property and owes $39.3-billion in future benefits to its members.

The plan covers 544,000 active employees and 112,000 retirees. Members include the state and nearly 800 government units, including counties, school boards and cities.

The debt amounts to about $1,220 for every man, woman and child in Florida. It costs state and local taxpayers about $800-million a year. The state's share is about $200-million.

Florida governments are required, under a constitutional amendment approved by voters in 1976, to finance future pension benefits on a sound actuarial basis. Laws implementing that amendment provided for the debt to be paid off in 40 years.

But the debt has grown continuously since the system was established in 1970, so paying it off keeps being pushed back.

The target date for paying off the debt is now set for 2021.

The employer _ which means the taxpayer _ pays the entire cost of each public employee's retirement contributions.

Those contributions amount to 16.52 percent of the typical employee's salary, up from 13.62 percent in 1988. The rate will be increased to 17.15 percent on Jan. 1.

The debt has nearly quadrupled in 11 years. State officials acknowledge it has exploded in the past but say they are getting it under control.

By the end of the decade, officials say, the system will begin fulfilling long-deferred promises to reduce the debt, and about 20 years later it will be retired.

"We believe the system is stabilizing and maturing," said Andrew McMullian, director of the Division of Retirement. "We are right on target, unless the Legislature comes in and tinkers with the system. We should be steady as you go, hold the course for the foreseeable future."