I would have agreed with you prior to hearing this argument: if someone's pension fund wants to trade 10,000 shares of a stock with a 2 cent spread, then in the next few seconds market makers are going to make $200, guaranteed. The only thing HFT changes is who the marketmaker that pockets the $200 is going to be: some day trader in the bathrobe, market maker at the exchange, automated proptrading strategy, or a sickeningly optimized HFT bot which measures execution times in nanoseconds. Either way, the pension fund is going to transfer $200 to marketmakers.
What you should be worried about is your pension fund actively trading, which it is doing because it is being managed by someone who takes ~2% off the top every year and who has to justify this by showing they can beat all these damnfangled machines at stock selection. They'll almost certainly underperform the index over time and overcharge index funds by about, oh, 180 basis points or so, precisely because they insist on conveying your wealth to marketmakers every time they trade.
What you should be worried about is your pension fund actively trading, which it is doing because it is being managed by someone who takes ~2% off the top every year and who has to justify this by showing they can beat all these damnfangled machines at stock selection. They'll almost certainly underperform the index over time and overcharge index funds by about, oh, 180 basis points or so, precisely because they insist on conveying your wealth to marketmakers every time they trade.