Legal

The head of San Jose's underfunded public pension program will step down just as the city votes on plans to change employee pension benefits.

Fee disclosure regulations that go into effect in July and August will come as a surprise to many plan sponsors, especially small and medium-sized companies, even though the regulations have been discussed for years.

The administrator allegedly used more than $3.2 million from the retirement plan savings of workers from many employers for his own personal expenses.

The move is a punative measure against a Facebook co-founder who has renounced his U.S. citizenship to avoid paying taxes when the company goes public.

The money may be set aside in case the state loses legal fights over collecting income taxes on public pensions or having state workers pay more of their pension costs.

All employees would contribute more, and the plan also eliminates a retirement program that allows workers to officially retire but remain on the job to accumulate benefits.