72 Missouri pension system workers got $460,000 in bonuses

ST. LOUIS -- Investment and operations staff at the Missouri State Employees Retirement System received $460,000 in bonuses as the pension system investments lost nearly a third of its value last year.

The St. Louis Post-Dispatch reported Friday that all 72 workers for the retirement system drew bonus payments. The newspaper had earlier reported that the system's 14-member investment team pulled down $300,000 in bonuses in February.

Last year, the system's investments lost $1.8 billion. But the portfolio fared better than the market over the last five years, triggering the payments.

The bonuses surprised Gov. Jay Nixon and have cast a spotlight on the agency, known as MOSERS. While funded from tax dollars, it operates without the usual public scrutiny.

Its salaries are not listed with state employees' wages in the state's Official Manual or the online Missouri Accountability Portal. Legislators have little control over the agency's operating budget.

Critics are calling for more oversight and transparency. Nixon has vowed to change the "smoky system" that shielded the employees' bonuses from public view.

"They get state health care, they get benefits from the state, they manage public money," Nixon said. "Setting up a smoky system where they get to hide behind some odd bonus program does not comport itself to the openness that government service should have."

Both Nixon and Senate Appropriations Chairman Gary Nodler, R-Joplin, said they opposed rewarding administrators when the pension fund lost 23.9 percent of its value. This week, Nodler's committee reduced MOSERS' appropriation by $300,000 to send a message that the bonuses were inappropriate.

The Legislature sets pension levels, but an independent, 11-member board oversees the system, which covers about 55,000 state employees and 30,000 retirees.

State employees make no contributions to their pensions. The system is funded entirely from tax money and investment income. Thus, taxpayers pay more when stock market returns decline.

MOSERS officials contend that by setting goals and awarding bonuses, the agency is following a successful business model that helps retain talented employees and improve performance.

"Having some portion of your pay at risk is a motivator," said Gary Findlay, executive director of MOSERS. The bonuses "aren't a gimme. It's something people really have to earn."

Some legislators said MOSERS should be brought in line with the rest of state government.

"It's not good to treat those (MOSERS) state employees fundamentally differently from other state employees," said Rep. Chris Kelly, D-Columbia, a member of the House Budget Committee. "There is widespread concern about that."

Most state agencies have no authority to give out bonuses. Their workers are part of the merit system, which uses a standardized pay grid.

MOSERS, by contrast, sets its pay levels and conducts a market study every other year to update salaries to keep them competitive.