Ten investment managers at the Arizona State Retirement System, which provides pensions for teachers and government employees, will be eligible for performance bonuses of up to 25 percent of their base pay if they exceed benchmarks and if the underfunded trust makes money.

The retirement system’s board voted 4-2 Friday to approve the program, which could provide bonuses ranging from $17,500 to $48,625 for the employees, according to records obtained by The Arizona Republic. The total cost could approach $350,000 annually for the trust if all employees obtain a maximum bonus, said ASRS Director Paul Matson.

Friday’s vote came on the heels of a 4-3 vote Wednesday by the Public Safety Personnel Retirement System board to give raises to five of its investment-staff members. A key state lawmaker and pension-reform proponent said he was stunned by Wednesday’s vote and hoped Gov. Jan Brewer’s administration would review the proposal before it goes into effect.

Matson said ASRS sought the new pay program approved Friday to attract and retain high-caliber investment professionals. Those employees are paid from $70,000 to $194,500 a year, and a bonus could be paid in September 2014 based on results from this fiscal year.

Maricopa County Manager Tom Manos, who chairs the ASRS board, voted against the program, saying the potential bonuses would be hard to justify to ASRS members and government employers who have been required to pay more into the trust to offset investment losses in prior years. He said it also would not go over well with retirees, who have not received a cost-of-living raise since 2005.

“For a number of people we work with, and our customers, this is not going to be well-received,” Manos said. “There will be a lot of negative push-back in the community with someone getting a $25,000 bonus.”

But board member Richard Jacob, a former Arizona State University physics professor, said having quality investment staff ultimately will improve retirement benefits and keep pension contribution rates down.

Voting yes with Jacob were Michael Smarik, Marc Boatwright and Tom Connelly. The other no vote came from Kevin McCarthy. Absent were board members Dennis Hoffman, Jeff Tyne and Brian McNeil.

The trust’s investment staff this past fiscal year produced a 13.1 percent rate of return, about 5 percentage points better than projected.