Planned changes to pension rules by the European Commission could cost the UK an extra £350bn and 180,000 jobs, according to the Confederation of British Industry (CBI).
A study for the business lobby group suggests the proposals, which include forcing employers to divert billions into defined benefit schemes, would be a "disaster" for the UK economy.
The CBI said long-term growth would also be cut by a potential 2.5% if the plans to require pension schemes run by individual employers to operate like insurance firms go through.
CBI chief policy director Katja Hall said: "Imposing £350bn more costs on business would be a disaster for the economy and for pension saving.
"The long-term economic outlook is so fragile and uncertain that it is crazy to entertain proposals which would cost jobs and cut so deeply into our long-term growth and competitiveness.
"We have a tough regulatory system in this country, so these changes are completely unnecessary.
"It's alarming the Commission is still turning a deaf ear to calls from businesses, trade unions and pension funds to bin these proposals.
The pensions minister Steve Webb described the Commission's plans as "reckless" and aimed to tackle a problem that does not exist.
He told Sky News: "The problem with a pension fund is that it's a liability for decades so you wouldn't have to pay a lot of this money for 10, 20, 30 years.
"What these European rules would require firms to do is shovel cash in now for liabilities that won't happen for decades."
The Government said it remains in discussion with the Commission about its proposals.