30W makes some valid comments - the problem with the open-ended promises made is that people simply do not know how long the current generation is going to live, and the commitment to those people is therefore far higher than many imagined when those promises were made.
Just to comment as well on the perception that bonds are a "safe" investment made a few posts higher: the reason that the scheme would want to invest in a bond is that the value of a bond moves in line with interest rates, but the future liabilities of the fund are determined also by interest rates. As the value of the two move together, with greater bond values occurring when liabilities are valued higher (i.e. with low interest rates), it is deemed safe for the pension fund. Let me stress that bonds are not a purely "safe" investment - there is always the chance of company, or even country bankrupties (Argentina), which write off the value of those bonds.
The problem with bonds is not only that it locks you into the defecit, but when the estimated longevity of the pensioners moves upwards (as at the moment), there is no comparable step rise in your assets!
As with any investment, a mixture of investments is wise, including all of:
Bonds
Equities
Property
Private Equity Funds
Hedge Funds
Currency
and of course, Cash
On another point, property is not at a high value due to any more people trying to invest in it. It is instead showing classic "bubble" attributes, as investments are fuelled by cheap debt (low interest rates), city bonuses, and the psychology of missing out on the historic property rises.