With the scandals surrounding the Illinois governor and the Bernard Madoff Ponzi scheme, the public might be close to suffering outrage fatigue. But the news this week that the Pennsylvania public school employees pension fund paid 21 staffers more than $854,000 in bonuses has Keystone State taxpayers shaking their heads again.

Given the widespread and deep declines in the stock market, it is not surprising that the state Public School Employees' Retirement System pension fund lost money — a $1.8 billion loss in the first half of the fiscal year. But the thinking behind the board of directors awarding bonuses ranging from $9,720 to $106,223 is beyond comprehension.

The bonuses were paid to staffers whose salaries range from $63,179 to $251,542.

In November, Gov. Ed Rendell sent the PSERS board a letter suggesting that bonuses would be inappropriate. Still, the board decided to go ahead with them, claiming it was a contractual obligation.

Days after news of the bonuses broke, the PSERS board voted to end bonuses, though reports indicate that PSERS investment executives could still be awarded bonuses for work from July 1 to Dec. 31.

While the stock market had already begun to tumble by the state's fiscal year end on June 30, an even steeper Wall Street drop has occurred in the second half of the year.

The payment of bonuses at PSERS is wrong on several levels.

The obvious problem is that the bonuses appear to reward failure — even if that failure, or loss in investment value, is less than the losses suffered by other pension funds.

The second reason for outrage is that other states take a different approach and avoid bonus scandals — they don't pay bonuses to the staff of state pension funds.

Auditor General Jack Wagner said he was appalled at the bonuses and urged the PSERS board to try to retract the bonus money. At the same time, Wagner repeated his call for the General Assembly to pass legislation that would ban the awarding of bonuses in state government. Wagner summarized his feelings simply by saying, "There is no place in state government for bonuses."

He's right.

If such a ban on bonuses had been in place in recent years, Pennsylvania would have avoided the scandal of Pennsylvania Higher Education Assistance Agency (PHEAA) staffers being awarded bonuses as well as the so-called Bonusgate affair, in which state House Democrats paid top staffers year-end bonuses that appear to have been linked to campaign work. Those bonus payments triggered an investigation by the state Attorney General, which already has produced indictments.

The PSERS pension fund was valued at $54.7 billion on Sept. 30, so the $854,000 in bonuses does not have a material effect on the value of the fund. And PSERS management argues that if its people had the same performance as other, comparable pension funds, the PSERS account would be down an additional $1.3 billion.

Creating an incentive program that rewards performance is laudable in some circumstances. But when the fund is losing money, even less money than other funds are losing, it galls taxpayers to see five- and six-figure bonuses being paid.

Though it might pose a challenge to managers overseeing the PSERS pension fund, the best solution is to follow the lead of states that ban bonuses in state government. Until that happens, no bonuses should be paid when the fund loses money.

Either way, there should be no more bonuses at PSERS or anywhere else in Harrisburg.