The enormous size of pension funds make them an obvious target for theft. (Look at the Labor Unions and the Mob in the 1960's.) Most every move will be made to transfer those funds into the pockets of upper management. For example, the legislation recently discussed on this board. Another neat tool for theft is jamming junk inflated stock into plans, instead of cash.
For example, suppose an S&P500 company owns a stake in a fairly new issue. The share price soars to unreal values. The CEO & CFO then pass this stock onto the pension plan, realizing the gain for the big company to boost earnings. The earnings gain bumps the big company's stock and triggers an option exercise and sale by the CEO and CFO, rewarding them with cash.
In the fullness of time, say months, the IPO stock in the pension plan collapses. Pension fund is screwed. Pension fund manager turns out to be CEO's buddy from college. SEC guys can't get plane fare from administration to even make a site visit. Sweet.
Lesson for us is watch corporate ownership of small companies and potential earnings short-falls. This could provide a shorting strategy in the IPO company. Get to the trough with or before the others.
Another lesson is if pension conversion opportunities arise, take them.