Picture this - you've been putting money loyally into a company pension scheme which guarantees to pay out a proportion of your salary as an income when you retire.

Then first of all the scheme is closed to new employees.

Next, the company decides to wind the scheme up altogether because it's too expensive.

It's a situation which is suddenly becoming commonplace.

Jeff McArthur from Chatham in Kent had been contributing to his employer's final salary pension for eight years when the company closed it down.

Equivalent

Since the scheme had a surplus over what it needed to pay out, he expected he'd at least receive a benefit equivalent to the pension he'd earned - a proportion of his salary.

How wrong he was.

He would have got back less than if he'd had the money in a bank account.

The amount I put in didn't reflect the amount I was getting back. Jeff McArthur

This is Jeff's pension problem.

Under the final salary scheme he should have received a pension of �2,378 a year once he came to retire.

That was inflation proof, so since he's 30 now, the eventual payment would have been a lot more.

The replacement on winding down the scheme is a personal pension.

Jeff has been offered a fund value of �7,577 - that's the total fund, not a retirement income.

He's calculated that the fund would have to grow by 9% a year for the next 32 years to provide an income comparable to the final salary scheme on retirement.

Advice

"I took out my first personal pension when I was 20, then joined the company scheme," he says.

"I'd followed all the advice and recommendations provided by regulators and perceived experts to plan for my retirement.

Malcolm McLean: Wants law changed

"In my personal experience it doesn't seem to have been worthwhile."

Malcolm McLean of the Pensions Advisory Service says Jeff's situation is not unusual.

"Many people are surprised that they are not getting a good deal when a scheme winds up," he explains.

"They are moving from a situation where they have a defined benefits arrangement - a promise effectively - to one where they're subject to the vagaries of the market.

"Many people think that's wrong. We'd like to see the law changed so that in a defined benefits scheme people's entitlement to date should be met in full in every situation."

Jeff is ruing the day he signed up for the final salary scheme.

It's one of the reasons he's now left his job.

His next move? To emigrate to Australia.