Missouri's main government pension system will no longer give bonuses to staff members after coming under fire for $460,000 in bonuses paid out last year despite a $1.8 billion loss in its portfolio in 2008.

The Missouri State Employees Retirement System board voted 8-1 Thursday to discontinue the bonuses and automatic cost-of-living raises for the system's 72 employees.

MOSERS executive director Gary Findlay defended the bonuses last year after The St. Louis Post-Dispatch detailed the pay plan, including a $114,000 bonus for Chief Investment Officer Rick Dahl.

But on Thursday, Findlay said anything that can be termed a bonus is "poison" in the current economic climate and huts the image of the retirement system, the Post-Dispatch reported.

"The reactions are incredibly emotional," Findlay said, calling the issue a "phenomenal distraction."

Several board members said they don't want the system's workers to lose money. The board will consider a new salary schedule in June, based on a review of staff salaries by Findlay.

Investment staff bonuses were based on how well the plan's investments performed over five years compared with similar portfolios. Investment managers got bonuses worth between $22,000 and $29,4000, while operations staff members received up to 10 percent of their salaries.

The retirement system covers about 55,000 state employees and 30,000 retirees, with the pensions funded from investment income and taxpayer money.

Defenders of the bonus plan said Missouri's system is outperforming its peers, and credited incentive payments to employees for that performance.

"By any objective standard, MOSERS is the best fund in the country," said Sen. Jason Crowell, a Cape Girardeau Republican who cast the lone dissenting vote on Thursday.

He said the board should not change its policy based on "newspaper articles and political speeches," and said taxpayers could ultimately lose money if the system's rate of return fell because talented staffers left.

Gov. Jay Nixon has called the bonuses "unconscionable," given the state's budget cuts and lack of raises for other state employees.