The key measures, approved by parliament in April, include raising the women's retirement age by a year to 65, putting it in line with men, as well as a consumption tax (VAT) increase to help fund benefits.
Proponents say those steps would help avert deficits in a social security scheme facing pressure from an ageing population, with baby boomers entering retirement.
Rising life expectancy, now at 83 years in Switzerland, has added further strain.
The reform proposal, which is backed by leftwing and centrist parties, also includes more retirement age flexibility and increased contributions from employers and workers.
The plan, officially known as Pension Reform 2020, will only come into force if voters also approve the corresponding VAT increase.
The vote is the latest in Switzerland's direct democracy system, which includes four referenda per year on major national issues.
The latest polls indicate the result is too close to call, with the pro-reform side slipping marginally in recent in weeks.
Support for the plan stood at 53 percent in mid-August, but had fallen to 51 percent days ahead of the vote, while just 50 percent of respondents said they now backed the VAT increase.
'Painful' but worth it
The co-director of polling and research firm GFS Bern, Lukas Golder, told public broadcaster RTS that there may be “irrational voter behaviour”, where people approve pension reform but reject the VAT increase needed to fund the system.
Rightwing parties campaigning against the move say it does not guarantee survival of the pension system after 2027 and that beyond that date, future generations will be forced to come up with yet another rescue package.
Pro-reform socialist politician and prominent women's rights advocate Maria Bernasconi said in a statement that while raising the retirement age for women was “painful”, the overhaul would mean “that for the first time in decades, our pension plan's finances will be improved.”
Most voters have already cast ballots by mail and final results are expected by 2:00 pm (1200 GMT).
Because the VAT increase requires a change of Swiss constitutional law, it needs double approval to pass, including majority support among voters and majority support in more than half of the country's 26 cantons.
By Agnès Pedrero