Like a number of other European countries, Switzerland is feeling the strain on its pension system as its population ages, with around one third of the country's inhabitants expected to be above retirement age by 2050.
In terms of retirement spending, "we will need to cut 1.6 billion francs ($1.7 billion, 1.3 billion euros) by 2020 and nine billion francs by 2030," Jürg Brechbuehl, the head of the Federal Social Insurance Office, said at a televised news conference.
The main change proposed by the government would be to require women to work up to the age of 65 before receiving a full retirement, instead of allowing them to bow out a year earlier than their male counterparts as they do today.
In addition, people will need to pitch in more towards their own pension accounts, but will on average collect 12 percent less after they retire.
"Ensuring that there is a certain level of economic growth is no longer enough to finance pensions," Brechbuehl said.
The Swiss pension system is three-tiered, made up of a mandatory state pension insurance for all, a mandatory occupation pension fund that is funded jointly by employers and employees and an optional private savings plan for employees who want to increase their retirement income.
Among the other measures proposed was a two-percentage-point hike in the VAT consumption tax in two stages to help finance the reform, as well as reining in the country's pre-retirement system.
If the government's proposal receives the needed nod of approval from both houses of parliament as well as from the people in a popular vote, it would mean that the Swiss would have to wait until the age of 62 before having access to pre-retirement, instead of the current 58.
"We need to adapt the system to ensure that elderly pensioners will be able to receive their retirement money even if they live to very old age," Swiss Social Affairs Minister Alain Berset told the news conference.
"It's our duty to ensure they have that security."
The Swiss Pension Fund Association (ASIP) expressed satisfaction at Friday's proposal, which if passed would take effect by 2020.
"ASIP supports the principals in this reform proposal," it said in a statement.