In the US there has been a steady shift in the way people save for retirement since the 1980s. It has steadily become more common to invest retirement savings back into the economy as a way to get higher interest rate returns than banks provide. Employers, rather than directly investing into a pension fund, give additional wages directly to employees for the purpose of investing themselves, although indirectly through a 401k plan.
This is a significant shift. Pension plans are expensive for employers, who have to pay guaranteed amounts to retirees out of their pension plan. They can use investments to reduce their payments into the pension fund, but it is their responsibility to pay enough into the fund to make the necessary payouts to pensioners. This requires a high degree of profitability and stability in a company or organization, which restricted the number of organizations that could offer pensions to their employees. Personal investments, savings in banks, or support by still working family members were the primary means of retirement savings for the rest.
401k plans reduce employer's responsibility, risk, and cost, thereby making retirement savings through investment (in large investment funds supported by populations of retirees) a possibility for a much larger number of employees. This has improved the living standards of many middle class and working class retirees. At the same time it has significantly increased the volume and stability of the flow of investment capital into the economy. This has decreased the average cost of capital to borrowers and made 401k funds a popular source of capital.
Besides their greater prevalence, 401k funds differ from pension funds in a number of significant ways. Pension funds tend to be managed by a board whose obligation is to manage the fund in the long term interest of the fund. 401k funds tend to be managed by for profit institutions that rely on some of the interest from their funds' investments for their own profitability.
The institutions that manage 401k plans tend to be much larger than pension funds, both in capital and in personnel. They can more exactly monitor, more effectively influence, and more efficiently redirect their investments. This gives the 401k managers significantly more clout with the corporations who are the main borrowers from these funds.
401k investment funds managed by for-profit institutions have a different motivation for investing than pension funds, than individual investors, even different from the motivation of the retirees whose income supports the 401k fund. Pension fund managers have the long term stability of their investment in mind since they are usually saving for retirement decades into the future. 401k managers must keep this interest in mind to an extent to avoid losing the source of their capital. However, the source of their capital is a largely captive group since who employees invest with is mostly up to their employer (a similar situation to that of employer provided health insurance, where the interests of the insured become largely irrelevant to the market forces).
Ultimately, for-profit 401k managers are motivated by an interest in their own profitability, and by the interests of their own shareholders. They have a responsibility to show quarterly profits to their own shareholders and therefore demand to see ample short term profits from the corporations they direct their investment capital into. This motivation and 401k funds' increasing clout pressures the corporations who rely on their capital to consistently show these short term profits. Not just profits either, but also constantly increasing profit rates .
Because 401k managers have the ability to more carefully manage their investment portfolio they are more apt to play the market, buying low and selling high, than they are to make long term steadily increasing investments. As corporations grow ever more reliant on this speculative source of capital, because this kind of capital increasingly dominates the capital markets, they are forced to go to ever more extreme lengths to increase their profitability. This effect is significant to the rise in corporate malfeasance that has paralleled the shift in retirement saving. Skirting ethical and legal standards has long been a risky way of generating higher profits. The demands of the new sources of capital make taking these risks necessary.