[mrep]

> Before then there were pensions which seemed more stable.

That's the problem. Companies/governments said they were stable but they were in fact not because they were based on the capitol returns which as you said "past returns do not indicate future performance". This lead to a bunch of companies/governments overpromising pension payouts and now they either get screwed if it was a company that went/is going bankrupt or the taxpayers get screwed because they are on the hook for those overly generous pension payouts.

[Gibbon1]

Depends, a lot of companies used the pension fund to buy back their own stock. Not that companies didn't also use 401k's for the same purpose with the same result. See Enron's 401k plan.