State employees and employers will have to contribute more toward their pension programs after a vote last week.

The board of the Public Employee Retirement System of Idaho, or PERSI, has elected to raise contribution rates by 1 percent.

The fund is targeted to reach a 7 percent return on investment each year but has fallen short the past three years, and by law the board is required to adjust rates to keep it funded at a certain level.

In order for this 1 percent hike to go into effect, the vote must be approved by the Idaho Legislature. And for the past 30 years, lawmakers always adopted the board's recommendations.

There are 780 different Idaho agencies that benefit from the state's retirement plan.

That includes 140,000 employees varying from police officers, teachers, sanitation workers and other government personnel.

A 1 percent increase passed on to employers would mean $17 million less for those agencies to spend, including $5.5 million less for Idaho schools.

“Anytime you appropriate for one purpose, you may not be able to do as much for another purpose,“ said PERSI Chairman Jody B. Olson.

Additionally, an extra $10.5 million will come out of state employee's paychecks.

But in turn, workers can anticipate a more secure retirement.

“School teachers in Idaho have a reputation of overworked and underpaid, people generally understand that they have nice retirement,“ said Olson.

More than half of laborers enrolled in the pension system are already retired and Rep. Stephen Hartgen who oversees PERSI’s rate adjustments, says this 1 percent increase ensures their retirement continues to payout.

“There are many people that rely on PERSI contributions who are retirees and look at that as an important change every year,“ said Hartgen.

Since the year 2000, there have been five different increases in contributions but Olson says they have been met with little opposition.

“The employers tell us nearly unanimously that it is a recruiting tool,” said Olson.

Pending approval of the Legislature, the rates will go into effect in July of 2018.