401k's are a bad deal because employees are at the mercy of the stock market at the time of retirement. Pensions should be able to smooth out ups and downs of investments better than a private 401k.
Also, with 401ks, you can invest in anything from small cap / developing world stocks, s&p 500s, large cap dividends, private bonds, public bonds, and U.S. treasury bonds.
If you have a large group of people commencing to draw down your fund, your time horizon can be quite short. Similarly, if you have future workers not in the program, you can't "pyramid scheme" it.
20 years of investing are required for most classic pensions and the CHP example workers are likely to have as many or more years than that. An appropriate age based fund (which would admittedly, likely have huge fees) would reduce risk of the money you'd be drawing down on in the next 10 years.
