Jister,
Went through this a while ago,
Can they just do this? Yes, if you look up the rules of the DB scheme there will probaly be a clause permitting Company to wind up scheme. What's happened here is that the company cannot afford scheme and wants liability taken off their books.
How do they portion up the total fund? Company's actuary will calculate a Transfer Value (TV) for all members (inc. those who have left but are still members). Take this value to your financial advisor for his opinion, more than likely it'll be much less that the "DB" value of your accrued pension but this is all company is permitted to pay you.
What are my options? Depends on how generous the company is.
Your financial advisor will determine the increased level of contributions required from you to match what the DB scheme would have paid out. You could ask company to share the cost of this with you. Alternatively a once off payment to your new DC pension (presume the company will now offer you a DC pension) along with the TV might help. From now on you are carrying the investment risk.
The unions in the banks have negotiated a hybrid DB/DC scheme where company will guarantee a %age of salary (DB) with the rest being DC.
Any other bright ideas? Join the Civil Service.
Rgds