Japan’s public pension scheme, the biggest in the world with $1,500bn in assets, should be overhauled to improve returns and management transparency, an advisory panel to the prime minister will recommend on Friday.

If Prime Minister Yasuo Fukuda, who was due to be briefed on Friday, backs the proposals, the shake-up of the Government Pension Investment Fund, a quasi-state agency, could start next April, a person familiar with the plan told the Financial Times. To become effective, a change of law would be required.