The switch from retail price index (RPI) to CPI took place this month and is likely to reduce the value of public sector pensions by around 15 per cent on average, according to the Pension Policy Institute.

Jonathan Baume of the FDA union described the decision to make the change – which is predicted to save the Treasury £1.8bn a year across unfunded pension schemes by 2015-16 – as “wholly unacceptable and potentially illegal”.

Unions have applied for permission to launch a judicial review, arguing that the secretary of state acted illegally by choosing a measure which is partly designed to take into account consumer behaviour, when the law requires him to have regard only to increases in the general level of prices. Along with the FDA, the action is backed by the GMB, Prospect, the Police Federation, plus lobby groups for police and civil service pensioners

Meanwhile, the Cabinet Office said last week that My Civil Service Pension (MyCSP), which administers civil service pension schemes, is to be turned into a mutualised joint venture between government, employees and a private sector partner.

The PCS union is opposing the plan, which CSW first reported in February . The union complained that the plans don’t envisage employee co-ownership, and require no employee consent or co-operation.

The row came as PCS members in Jobcentre Plus call centres across the country took part in a 24-hour strike over working conditions and performance targets.

Speaking last week at Civil Service Live – West Midlands, Efficiency and Reform Group chief operating officer Ian Watmore said that ministers are “extremely keen on good, open, productive negotiating with union leaders”, but are also “determined that changes will go through”.