This paper shows that shifting the portfolio allocation of a government-run pension fund towards more equity investment, ceteris paribus, tends to reduce the aggregate capital stock as well as the average consumption level of all individuals except the poor retirees who consume more on average but at the cost of increased uncertainty. If a larger capital stock is desired, reducing the supply of publicly supplied goods is the most effective tool. That change also increases the average private consumption of all the young and the wealthy retirees although it does reduce the average consumption and uncertainty of the old non-savers.