It's tied up in both. Pension funds were severely underfunded, and unlike a 401k, they're defined benefit. Money was promised decades ago and now it's time to pay up, but they're not at where they need to be to make payments.

Thus... there's no other option. Government has had to seek out incredibly dangerous investments. The largest purchaser of hedge funds, venture cap, etc... is pension funds. People claim evil capitalists are driving greed in expected return. To the contrary. The government is demanding high rates of return, and enterpreneurs and capitalists are providing a supply.

Then, when things go wrong as they inevitably will, because you can't beat the market's valuations, everyone points fingers. But the demand for the high rate of return is primarily driven by government pension funds. Without them, a more modest rate of return would be demanded, and companies like BlackRock, Vanguard, etc, wouldn't be incentivized to purchase commercial or residential real estate in those amounts.