The transfer value may be reduced for underfunding, but the amount of your deferred pension should not be affected, unless the scheme is so badly funded that the trustees have sought (and obtained) a Section 50 Order reducing members' accrued benefits. If this had happened, a consultation period would have been required, so it seems unlikely.
What seems more likely is that there was an error in your annual benefit statements. If this is the case, it was probably due to failure to allow for the fact that you had been job sharing for a number of years. If redundancy was voluntary and if you made a decision to accept the redundancy package on offer in the belief that you would be entitled to a much higher deferred pension, then you MAY have a case against the scheme's administrators, but only if you can prove that you were misled and that this influenced your decision.
Regarding whether or not you should take a transfer value, Steven's blog is an excellent summary of the pros and cons. The key issue is whether you believe the scheme will stay in existence and pay your deferred benefit or will wind up at some stage. If this wind up were to occur before you reach retirement age, it's possible that the transfer value payable on wind up may be reduced to a greater extent than any reduction currently applying. You will need to make a judgement call in this regard based on the information set out in the documents mentioned in Steven's blog.