shares and pensions

Can someone explain how a shares collapse creates a pension crisis and where the money goes?
I would have assumed that a manager of a pension fund would invest the capital, when shares were low and possibly sell when high, as all efficient Capitalists do.
Or do pension fund managers effectively give away money by doing the reverse?
Nevertheless, I would also assume that the primary means of creating pension payments is not by gambling on share prices but by harvesting the dividend payments and sitting tight on shares that have a solid base for future dividends.
Still! one does wonder who the numpties are, who are buying shares at the higher price and selling at the lower price, especially in a market that has been rising and falling on a weekly cycle.
This is even more curious when one considers that really large companies must operate their own finances and profitability on a cycle of three or so years, unconcerned by shorter term fluctuations.
Even if it was thought that there was going to be a collapse of the money markets, why exchange asset based shares for IOU’s (the Pound, Euro,Dollar etc.) from politicians?
 
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