Interest rates for November, impacting retirees collecting their BP RAP benefits on March 1st, 2022, saw both higher and lower rates depending on which of the corporate segment rates we are comparing. The 1st corporate segment rate was noticeably higher, while the 2nd segment rate was essentially unchanged, and 3rd segment rate was lower versus October’s rates. In plain English, this means rates overall were mostly the same as last month and not to expect a substantial difference in your pension lump sum value or annuity payment values.
Looking into the new year, we anticipate interest rates will continue to increase, however we may see short periods of declines as new COVID variants arise. With the current Omicron variant, the US and other governments across the globe are ramping up lockdowns and vaccine mandates despite the Omicron variant showing very low hospitalization and death rates in both the US and worldwide. From an investment standpoint, we are less concerned about the new variant and more focused on our government’s reaction to it. Both domestic and international interest rate (Bond) markets can be highly sensitive to policy changes which could affect the productivity of the country. The outcome of where interest rates move in 2022 is highly dependent on what government policies are, or are not, implemented. – we favor the latter.
Another new development in the fight against COVID-19 is that the Biden Administration seems to have changed its stance as to how it intends to confront the continued impact of the virus. Now that the total number of COVID cases and deaths far exceeds the numbers under his predecessor, President Biden has announced his intention to pass the responsibility on to the individual states. – a move we applaud. This change could lead to upward movement in our national productivity as states with governors who favor keeping their economies open will likely do far better than the states who maintain business lockdowns and other mandates. Meaning the increased productivity of “working” states should lift the overall productivity of the country as a whole and thus provide additional upward pressure on interest rates due to continued economic strength.
If you are considering retiring or separating from BP in the near future, we strongly recommend you contact our dedicated team of BP Employee Retirement Specialists. We can help you understand how and when to collect your pension benefits. This service is free of charge for all BP Employees and Retirees.
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