It is "totally unfair" to expect private sector workers and tax-paying pensioners to subsidise civil servants in retirement, CBI chief Sir Digby Jones will tell the Labour Party conference today.
He says the Government must face down the unions and grasp the nettle on public sector pension reform.
Failure to tackle the problem of growing longevity in the same way that the private sector has had to do will lead to an unacceptable and unfair tax burden on companies, their employees and pensioners.
Sir Digby, who will be sharing a platform with trade secretary Alan Johnson and TUC leader Brendan Barber, will warn: "Without reform, we face the spectre of a ' pensions underclass', with private sector employees and companies struggling to fund pension benefits for themselves, whilst they and even tax paying pensioners are forced to pay for a more generous and earlier retirement for Government workers.
"The 'I'm all right Jack' attitude of many public sector union officials really is showing itself. Just who is the public sector for, the people who it serves or the people who work in it? The unions' attitude to pensions reform provides an unacceptable answer."
Rising pension costs have forced companies to pump an extra £25 billion into their pension schemes in the past decade over and above expected contribution rates.
On top of this, companies offering defined benefit pensions are faced with an additional bill to support the Government's Pension Protection Fund, which is threatening to spiral well above the promised £300 million per year.
By contrast, claims the CBI, little has been done to address public sector provision in the face of people living longer and healthier lives.
This is despite the Government's largely unfunded pensions liabilities more than doubling to over £500 billion in a decade.
"This time, the Government must face down the unions and grasp the nettle on public sector pension reform," Sir Digby will say.
"It will not get away with publicly declaring its intentions for a second time and backing down at the first sign of trouble. "Bringing the retirement age up to 65 - in line with the private sector and reflecting longer active lives - would be an important first step.
"It is hardly 'working till you drop'. Many firms have redesigned benefit structures and revised employer and employee contributions to keep schemes affordable, and the Government and local authorities must do the same for their employees.
"The old argument that generous pension provision compensates for low public sector wages no longer holds water, with average pay rises for public workers over the last five years consistently above the private sector average."