What the Social Welfare Bill proposes is that Pensions Schemes cannot directly borrow as part of their investment strategy.
However, even before the Finance Act 2004 (which allowed borrowing), it was possible for Schemes to borrow "indirectly" either by investing in a separate Unit Trust which held the borrowing or by investing into a special purposes vehicle (a company established specifically to buy an asset with borrowing).
A geared property fund is similar to the above in so far as the gearing is not on the books of the pension scheme buy rather the borrowing is within the fund managed by the Life Office. In effect the pension scheme is simply investing into a unit linked fund which itself has arranged the borrowing on a non-recourse basis. So the borrowing is arranged by the Life Office not the individual pension scheme. Typically such geared pension funds are structured to buy a "trophy" building and a number of pension schemes then invest in the fund.