This paper investigates the interplay of control rights and capital structure in pension funds. Retired participants have a debt-like claim on the fund, whereas active participants and employers have an equity-like claim. The value of the latter claim increases in risk level whereas retirees want to avoid risks in a well-capitalized fund. This introduces an intergenerational conflict over risk taking. The paper analyses the conflict, proposes that it results from limited liability of the young and looks at several solutions as more control for retirees and ex ante contracting on the risk level. The model is supplemented with empirical findings on risk level and demographic composition of Dutch pension funds in 2007.