Here is one thing to consider. A pension trades returns for stability. People pick a pension as their form of retirement because they have a lower risk tolerance. Anytime these tradeoffs are happening you are going to see wealthy people who took the risk side and came out ahead.
Did you know your insurance company is getting rich off your premiums? Are you going to stop paying them and get out of this "greedy" arrangement that takes from poor you to rich them?
Obviously my comment isn't the full picture either. These institutions often have moral hazard, etc.
But it's the only game in town. I'm a socialist, but until there's a world where we're all taking care of each other and running worker co-ops, I'm going to have to operate in the existing structures.
In some cases (eg health insurance) I believe a single large national pool is preferable.
Should credit unions offer insurance... I am not sure. I think it's reasonable if that's what the credit union members want, but they'd need to be very careful about the policies they were issuing and the potential payouts.
Where I live, there's a cap on the profits from insurance. I've gotten letters a few times saying due to high profits, the premium for the last month of the year was going to be lower.
That doesn't prevent them from running other scams like 10 year 'insurance savings' with 1% total yield, but those are optional.
You chose the worst example possible. For profit insurance is a scam, as the insurance company ultimate goal is to pay the minimum amount possible for claims, even after people have diligently paid very expensive premiums. It is one of the most rigged system, which amazingly is culturaly acceptable. (I am sure it is going to go the way of the "private firefighters" in the future).
Here is an example of exchanging risk voluntarily that I don't fits your comment. Farmers will often make deals to sell their goods for a fixed amount before planting. The other side of that deal is a futures contract where investors speculate on commodity value. The farmers accept lower returns while the investors may get fabulously wealthy. Are the farmers being scammed?
Everything beyond that is a scam. High fees for what should be a simple task, or taking reckless risks or allocating to active managers, is where the scam part comes in, and most of the industry is guilty of that.
My guess is that much of the distortion is caused by moral hazard where pensions know they will be bailed out for taking ridiculous risks, not because they pay professionals to manage money.
If pensions have a problem, it's because they were never economically viable, and at this point basically serve as a vehicle to transfer money away from the majority of people and towards retired boomers and government employees.
They might have. However any look at generational wealth dynamics quickly dispels that idea. Any above market performance rich people have are simply able to have better managers because managing bigger pools pays more and maybe an education which focuses on maintaining and building wealth. This education could be widely available but it is not made widely available. I am not going to imply a conspiracy here or appeal to class interests for explanation and just leave it as a statement of fact.
Generational wealth statistics, as well as heritability research, are consistent with the idea that expected wealth is causally preceded by genetically heritable factors.
Wealth is mean-reverting along genetic lines on multi-generational timescales. The idea that wealth is self-perpetuating per se fails to explain the degree to which e.g. poor lottery winners do not kick off dynasties, why children of moderately wealthy parents also tend to be moderately wealthy (not explainable by direct inheritance), etc.
The one domain where your model works better is perhaps for extremely wealthy families like the Rockefellers, but I'm hesitant to say that the model generalizes - that sort of thing might be a rare exception.
For example: The child of a doctor or lawyer is much more likely to be pressured or encouraged to go into law or medicine.
They have, of course, tested this as well.
If you don't understand that the child of a lawyer will be encouraged or pressured into going into law, and therefore staying in the socioeconomic group, you'll overrate genetic factors.
At a minimum, this topic is more complicated than you think, and you aren't using the correct statistical terminology when you discuss it.
Also pension funds take over money from young or middle age, yes, but not giving it to anyone else than themselves on the end, when they became old. It is not given to boomers, are you sure you know what pension funds do and how it differs from traditional (social) pensions?
Not given to else eventually, except in the meantime when given into the care of financial professionals to hold it for them to keep its value - for a very generous fee, not for free of course, the fee of the professionals is determined by the professionals themselves - and indirectly to bad politicians to finance the everlasting popularity spending and consequential budget deficit through bonds (or sometimes for a good cause too, like in recent and ongoing turmoiled period in the form of social support, which might still strongly overlap with popularity runs, see current UK government).