hi lifebegins,
there are (of course) a number of things you haven't made clear, but perhaps the most important is whether the "taken over" part of your job is actually the whole of your job, or just a part of it. also, what are "they" expecting you to do with your time now?
would it be possible for you to continue the remainder of your work and simply leave them to get on with the bit they're so keen to take over? or are they expecting you to work on that part, but in a junior position?
i think it's time for you to do some cold hard thinking, about where you'd like to go from here. consider your options. it could be that you could get some retraining paid for by the company, either in the same field or a slightly different one. (you have a right to insist.) or it could be that you could take them to the employment tribunal and make them pay the missing part of your pension while you sit back at home and prune the roses or study to become a rocket scientist.
i'd say DEFINITELY keep notes of EVERYTHING, whether you choose to use them eventually or not. also, contact the employment tribunal &/or citizens advice, for some basic advice, so at least you know where you stand. it may be that you can stay in post and do far less work for the same pay. if you want to stay, don't play into their hands. if you want to leave, leave on your own terms.
i once left a job where "they" intended to call me up in my new job, for advice/expertise, whenever they wanted. i smiled and said that's fine, and trebled my hourly rate as a consultancy fee.
find a way to make this work for you. and find a way to enjoy the options life throws at you.
good luck. and keep us posted.