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The Pennyslvania Pension Pinch

Solely Relying on Your Employer for Retirement Could Be a Risky Strategy

Across the country states are in a pension crisis. The Congressional Joint Economic Committee’s December 2011 reported that public pensions are only 77 percent funded nationwide, and private pensions are also severely lacking funds . Traditional defined benefit systems, or pensions, face big changes in both sectors. The International Business Times recently stated that car giants Ford and General Motors would be offering buyouts to make up for pension shortfalls , and California is considering a 3 percent state income tax increase to help cover teacher pensions according to CNN .

Pennsylvania is no exception to the national pension problems. The commonwealth has a public pension liability of more than $118 billion and is only 75 percent funded, according to the Pew Center on the States “The Widening Gap” report . Some changes have already been made in order to deal with the huge shortfall.  The Pittsburg Tribune-Review claimed that in 2010, Governor Randall signed legislation raising the retirement age to 65 and increasing the vesting period from 5 to 10 years.  State lawmakers are still scrambling for a solution, and one suggested plan is to switch all new state employees from the defined benefit plan to a defined contribution plan similar to a 401(k)

With all this up in the air, one thing is clear: you may not be able to count on your employer to get you through retirement anymore.  You can, however, create your own personal pension plan.

To build your own pension, consider the following steps:

Finally, it’s important to work with a team of qualified professionals who will help create and oversee your ideal retirement income plan.  You may not be able to rely on your employer, but you can still ensure yourself a dependable and comfortable retirement future.

Joint Economic Committee, “States of Bankruptcy,” U.S. Congress, December 8, 2011.

Benjamin Reeves, “GM and Ford Pension Buyouts: Should You Take A Lump-sum Pension Buyout?” International Business Times, June 4, 2012.

William Bennett, “Pension reform is key to California's budget crisis,” CNN, May 16, 2012.

Pew Center on the States, “The Widening Gap,” June 18, 2012.

Clara Ritger, “Pennsylvania Pension Changes Proposed,” Tribune-Review, May 29, 2012.


Christopher Scalese, financial advisor and president of Fortune Financial Group, is best known as Northeastern Pennsylvania’s Retirement Specialist. Scalese has spent the last two decades of his career assisting area residents with the financial transition from the working years to the retirement years. His primary goal is to help individuals structure their finances so that they have a steady income throughout their lifetime, while working to ensure their finances aren’t overly exposed to risk or unnecessary taxation. Scalese is an investment advisor representative, life and health insurance licensed and currently working on earning his Chartered Financial Consultant designation. Scalese received his Bachelor of Science degree in finance and Master of Business Administration degree from Wilkes University. For more information about Christopher Scalese and Fortune Financial Group, please visit

Fortune Financial Group, Inc., is an independent firm with securities offered through Summit Brokerage Services. Inc., Member FINRA, SIPC.

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