So there's a lot going wrong here, pay-to-play, investment in hedge funds that no-one had ever heard of, investment in funds that ended up performing poorly, etc. However that isn't the real problem here - the real issue is decades of under-contribution to these funds by the state government.
I think think there are two separable sets of problems that both important, but can fixed independently of the other:
1) The lack of responsible stewardship in overseeing the pensions and how they were invested.
2) Under-contribution to these funds.
Follow-up:
I think the best way to deal with 1) is to do something like the Ontario Teachers' Pension Plan, which is "jointly sponsored by the Government of Ontario and the Ontario Teachers' Federation" [0] . You can still have greed ruining things, but at least the administration of the plan is totally dominated by a sometimes adversarial entity i.e. the state government.
This article isn't really about under-contribution. It's about corruption. If your response to an article about corruption is to change the subject, then it's unlikely that we'll see improvements.
The corruption is appalling but also easy to fix. The threat to people's retirement is not happening because of the corruption though - if this was a fully funded scheme and the board was taking kick-backs to steer business from one fund to another one it would still be appalling but it wouldn't risk tens of thousands of people spending their old age in dire poverty.
