Six unions have mounted a legal challenge on behalf of millions of public sector workers over what inflation index is used to increase their pensions.
A judicial review hearing starts in the High Court on Tuesday (25) to challenge the switch to using the consumer price index (CPI) instead of the traditionally-higher retail price index (RPI) for the annual increase in public sector pensions.
The move - effective from April this year - was announced by chancellor George Osborne in the June 2010 budget, without any consultation or negotiation. The government claims CPI is the more appropriate index, but the unions have always contended the change was a deficit reduction measure.
As part of the ongoing talks over wider cuts to public sector pensions, ministers have since ruled out any negotiations on the issue.
The government must review pensions and benefits each year against increases in prices and uprate them by at least the same percentage. September's inflation figures put CPI at 5.2% and RPI at 5.6%.
Because CPI is around 1.2% lower on average than RPI, the loss to existing public sector pensioners will be around 15%. It is already affecting staff currently paying into career average schemes whose pension pots are revalued annually and will be smaller when they retire.
The switch has also been applied to many private sector pensions, wiping an estimated £75 billion off their value. Some estimates put the figure even higher.
The unions' case is that the imposed move was not permitted under social security legislation, and that it reneges on assurances given by successive governments that RPI would apply.
The six unions are the Fire Brigades' Union, teachers' union NASUWT, Prison Officers Association, Public and Commercial Services union, UNISON and Unite.
All the unions have either already balloted for industrial action, are balloting, or will be supporting the day of action over pensions on 30 November.
There will be a demonstration in support of the judicial review outside the Royal Courts of Justice, Strand, London WC2A 2LL, from 8.30am to 10am on Tuesday 25 October.
FBU general secretary Matt Wrack said "The government actions are unfair and, we believe, unlawful. This is a vicious attack on existing and future pensioners that could cost them tens of thousands of pounds.
"Pensioners are being forced to bear an unfair burden for the financial crisis caused by the banks. Firefighters will be robbed of thousands of pounds while the bankers who caused the problems continue to count up huge bonuses.
"We're being told to work a lot longer, pay a lot more and now get a lot less. Hard hit pensioners don't feel 'we're all in it together' when the chancellor's chums in the City still have their snouts in the trough at our expense."
NASUWT general secretary Chris Keates: "The question the court is being asked to answer is whether it is just and fair to arbitrarily change the basis on which pensions are calculated, reducing their value by thousands of pounds.
"The government's actions are a breach of the contract with ordinary working people. We are looking to the court to make sure that millions of ordinary workers will not be left facing a bleak and uncertain future at a time when cost of living is soaring."
POA deputy general secretary Mark Freeman said: "Once again the government has shown its willingness to attack the vulnerable in society to protect their friends in the financial institutions. The trade unions will demonstrate their support for pensioners on 30 November and the POA urges all right thinking workers to demonstrate on that day.”
PCS general secretary Mark Serwotka said: "The switch from RPI to CPI is just another example of how this government wants public servants, pensioners and people entitled to benefits to pay the heaviest price for the recession. For new entrants to the civil service it means an immediate cut in their pensions, ripping up an agreement we reached just a few years ago.
"As well as challenging this in court, the unions are mounting the widest, most co-ordinated industrial action we have seen in our lifetimes, to force the government to think again and show how out of touch millionaire ministers are with the lives and concerns of the rest of us."
UNISON general secretary Dave Prentis said: "UNISON is backing this judicial review because we cannot allow the coalition to run roughshod over pensioners.
"The way that a country treats its citizens when they retire is a mark of a decent and fair society. The government has stepped over that mark - the switch is nothing but a cynical, multi-million pound raid on pensioners to pay down a deficit they did nothing to cause. This flawed measure of inflation does not even include housing costs - a major expenditure for many retired people.
"Instead of clobbering pensioners, and people on benefits, the government should impose a tiny tax on financial transactions that would raise billions."
Unite general secretary Len McCluskey said: "Our legal challenge against the coalition government is hugely significant for workers in both the public and private sectors.
"Public sector workers face an opportunistic attack on their pensions by this government, but many workers in the private sector have also been affected.
"Vested interests are trying to create a wedge between public and private sector workers, when in reality they have common cause on this. We know that some private sector employers are already attempting to move to the lower inflation index citing the government's example. In reality this government wants us all to work for longer and for less."
FBU press office 020 8541 1765 or 07736 818100
NASUWT press officer Stuart Gannon 07966 198894
POA press officer Glyn Travis 07968 324045
PCS press officer Richard Simcox 020 7801 2747 or 07833 978216
UNISON press officer Anne Mitchell 020 7383 0717 or 07887 945307
Unite press officer Ciaran Naidoo 07768 931315