NEW YORK (CNNMoney.com) - Pension plans that are facing a growing number of retirees are seeking bigger returns by pouring billions of dollars into hedge funds, investments that may be risky, a news report said Sunday.

The New York Times, citing a study by Bank of New York and the consulting firm Casey, Quirk & Associates, said that pension plans and other large institutions are expected to invest as much as $300 billion in hedge funds by 2008, up from just $5 billion a decade ago.

The pension plans, whose sole purpose, by law, is to pay out predetermined benefits to retired workers, are attracted by hedge funds' promise of richer or more consistent returns.

But the development has caused some consultants and experts to question whether hedge funds are appropriate investments for pension funds, the report said.

Hedge funds, the secretive investment pools once open only to wealthy individuals, are lightly regulated and often invest in instruments that make their risks hard to assess.

Most pension plans have just modest stakes in hedge funds but others have invested more than a fifth of their assets, the newspaper said.

It noted that the paper company Weyerhaeuser (Research), for example, has 39 percent of its pension fund's assets invested in hedge funds.

The report also noted that there's been a push in Congress for amendments to make it easier for hedge funds to manage even more pension money without having to comply with the federal law governing company pensions.

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