There are two types of pensions, final salary and defined contribution. I stand to be corrected but since BA closed its final salary scheme to new joiners many moons ego there are no longer any of these around in the UK. Final salary schemes quite simply paid a fixed percentage of your final years salary till you popped your clogs. Some schemes also had rules covering situations where your spouse/children outlived you and hence paid them a pension till their death.
So the other type are defined contribution schemes. The 7% you refer to is paid to a pension fund manager who in turn invest it into shares, government stock and many other types of (usually) lower risk financial instruments. There will be rules about how much you can pay in on top of the companies contribution and also each country will have its own rules and regulations covering situations such as you changing employer, emigrating and who gets what should you die in service before you get to cash in your pension pot.
The bottom line is that the only guarantee with a defined contribution scheme is that the fund manager will get paid. Even if this means taking their fees out of all the capital built up in the fund should the fund be in a deficit situation. The "bank" always wins. The end result is that after a career of both a company and yourself paying into a scheme it could be worthless.