SchwedenSweden is preparing major changes for the $173 billion in assets managed by its pension funds and will ease restrictions on private equity and infrastructure investments to boost returns and safeguard income for retirees.

“There will be a big change,” Financial Markets Minister Peter Norman said in Stockholm. “There will be opportunities to invest more in non-public, more in infrastructure and that kind of thing, which is good for long-term savings.”

The shift is part of a broader overhaul of the Swedish pension fund system. The government and largest opposition party, the Social Democrats, last week proposed reducing the number of state pension funds to three from five, to cut costs. They proposed to loosen rules which have limited private equity investments to 5 percent of assets at four of the funds.

  Bloomberg