A year ago, Andrew Parr, 58, was a process control engineer at the Sheerness factory of the steel company ASW. He was well paid and, though he did not expect an enormous pension, he thought he and his wife, Alison, would be comfortable in retirement.
Then ASW went into receivership. Mr Parr still thought the situation would not be disastrous. With 22 years in his company pension scheme - membership was compulsory when he joined - he thought he might have to retire a year or two early, with a slight loss of benefits.
"The full horror became apparent after a couple of weeks," he said. The ASW scheme was in deficit when it was wound up, and, because rules insist existing pensioners take priority over those who have not yet retired, Mr Parr found he would get only 35 per cent of his expected pension, perhaps £5,000 a year instead of £15,000. He has lost the equivalent of a fund of more than £250,000.
Mr Parr has found another job at a lower salary, a substantial amount of which is spent on travel to and from work. He and his wife find it hard to pay for big expenses such as a major repair to the central-heating boiler, and they have no money to spare these days for pension contributions to improve their situation in retirement. The Parrs agree with Sheila McKechnie, director of the Consumers' Association, who said people no longer know who to trust on pensions, whether it is the Government with its much-criticised state second pension, employers closing final-salary schemes or the shrinking bonuses in personal pension schemes.
A growing spare-time occupation for Mr Parr now is running the pensions website www.pensionstheft.org, which started to help ASW scheme members and is now a focus for the thousands of final-salary scheme members in a similar situation to Mr Parr. The site lists more than 60 companies affected by pension wind-ups, and calculates that as many as 40,000 people may have lost some - or, in a few cases, all - their pension rights.
This nightmare is not designed to encourage anyone to join a final-salary scheme. "Final-salary pension schemes are unworkable, but they're still great for workers who can get them," Graham Duckett, pensions specialist at IFA the Millfield Partnership, says.
National Association of Pension Funds (NAPF) research shows that anyone starting a job today would be lucky to get into a final-salary scheme. A survey last month concluded that only 19 per cent of employers now offer one. So if you do get the chance to opt in to one, should you take it? "I would bite their hand off," Mr Duckett says. "Get in without hesitation." He says the changes announced by the Government on 11 June remove a major problem: solvent employers cannot now wind up a scheme leaving members with a reduction in future benefits; they must give contributing members, as well as pensioners, a full transfer value, as promised by the scheme rules. And an insurance scheme is proposed which should protect members whose scheme is wound up because the company becomes insolvent.
But Ronnie Lymburn of the Annuity Bureau says: "If you join a company as a normal employee, rather than as a senior executive, and have no job security, joining a final salary scheme is not necessarily clever. With a money purchase scheme what you will get, at least, is explicit and you can't lose it in a wind-up."
You can get an idea of the state of your scheme if you look at it from a non-trusting, even cynical, point of view. The better the terms it offers, the more likely it is to be in difficulties. Does it have a low retirement age or offer better-than-average benefits? Both will make it more costly to maintain. The more the fund has in equities the more it will have suffered from recent poor stock markets. So joining a final-salary scheme will be a leap of faith from here on in. "If your employer is still offering a scheme, you have to hope he has done his due diligence and the funding is OK," Mr Duckett says. You will have to make assumptions of your own about how likely the company is to go bust or to be taken over.
The closure of a final-salary scheme (rather than one that is wound up) by an employer who continues to trade is not necessarily a problem. In these circumstances the scheme may be available to existing members, or a good transfer value into a company money-purchase scheme may be offered. In practice, the employer's contributions to your pension under a final-salary scheme, and the promised benefits, could prove very valuable.
You are unlikely to find a financial adviser who will say, "This scheme won't last". Few are specialists in corporate pensions, and those who are tread carefully. After the pensions mis-selling scandal of the late 1980s there is an unspoken understanding among advisers not to advise anyone against joining a final-salary scheme.
The Government is still positive about company schemes. "Most members of an occupational pension scheme will be better off when they retire than they would be if they had not joined it ... occupational pensions are usually a very good deal," says its booklet A guide to your options, available at www.thepensionservice.gov.uk). There are a few thousand former scheme members with whom that statement will ring very hollow indeed.
* Go to an adviser regulated by the Financial Services Authority. You will have a guarantee of competence and someone to complain to if things go wrong.
* Check charges. These can change during the life of the policy, but a low-charging provider is likely to stay that way.
* Check performance. Money Management magazine runs tables every month. It is a limited guide.
* Spread risk. You don't have to put all your savings into a pension. Start an Isa and a stakeholder pension.
* Check the solvency of the scheme, the employer and their commitment to the scheme. All three are difficult to assess.
* With a money purchase scheme what you get is explicit and you can't lose it in a wind-up