BP EMPLOYEES,
***Important notice***
DUE TO A CALCULATION ERROR BY THE IRS, BP’S PENSION DEPARTMENT MAY BE ERRONEOUSLY REPORTING THE INCORRECT VALUE FOR THE 30-YEAR TREASURY RATE FOR JULY 2019. PLEASE BE CAUTIOUS IF YOU ARE PLANNING ON USING NOVEMBER 1ST AS YOUR BENEFIT COMMENCEMENT DATE. NOVEMBER PENSION BENEFITS ARE BASED ON JULY’S INTEREST RATES.
On August 14th, 2019, the IRS incorrectly reported the 30-year treasury rate for July 2019 to be 3.01% when it was actually 2.57%. Our team noticed this and has notified all parties involved – IRS, Fidelity and BP’s Pension department and expect to see them make the correction in the coming days. How and why the IRS miscalculated such a fundamental and important number is unknown, but it was significantly off, and appears to have rippled through BP’s system before it was noticed by our team and confirmed by our custom-built forecasting model.
Again, you should be cautious with your pension calculation. Please call me so I can double check that your pension is reflecting the correct rate of 2.57%, not the 3.01% that was incorrectly released. I can be reached at 877-739-6007.
July’s interest rate movements, affecting November 1st benefit commencement dates, continued their decline and were slightly below our forecast but not significantly different, August’s rates appear to be a different story. We are forecasting a steep drop in August’s interest rates vs July’s due to escalating market concerns about the looming trade war with China, a global economic slowdown which is beginning to emerge and the Federal Reserve lowering interest rates for the first time since the 2008 financial crisis.
It may sound scary but from an economic standpoint the US is still on solid ground, for now. If you look at this news from your pension’s standpoint it’s actually great news especially if you are a Heritage Employee and looking to retire later this year or early next year as you should expect to see a large increase to your pension lump sum value resulting from this sharp drop in interest rates.
Juggling the asset allocation of your 401(k) and timing when to take your pension can be a tricky task when markets are choppy. In times like this it is very important that you have someone in your corner who has the experience and knowledge to assist you in dealing with these situations.
If you are considering retiring within the next one to two years, we would highly encourage you to talk with one of our retirement planning specialists who can help you understand what your potential retirement timeline looks like and how to strategically plan your exit, please feel free to contact me directly at 877-739-6007 or at tyler@capstonewealthadvisors.com. As always, we will assist you free of charge and with no obligation.
Tyler E Ryan
Capstone RIA
877-739-6007
Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
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Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
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