RAP/Pension InterestRate Chart July 2021

Attn BP Employees,

June’s interest rates which impact BP Employees collecting pension benefits in October, declined substantially from last month and were mostly in-line with our forecast. Looking forward, we anticipate rates will continue to drop and strongly suggest that anyone considering retirement or separating from BP in Q4 of 2021 to pay close attention on how the current rate decreases will affect your pension benefit options.

The rate drop came as a surprise to many bond investors, as most media outlets were expecting rates to increase due to inflationary fears and the Federal Reserve’s policy that a temporary increase in inflation is warranted at this time.  Despite the Fed’s stance, financial markets disagreed with their outlook and did a 180-degree turn, pushing rates lower due to fears surrounding the new “Delta Variant” and impacts it may have globally with respect to lockdowns and mask mandates being reinstated.  While there may be legitimate concerns surrounding the potential of new mask mandates or lockdowns due to the new Delta Variant, we do not believe the impact will have the same magnitude in size or scope of what we saw last year. Although there could be short term increases in volatility, we see financial markets returning to a more “normal” pattern in the coming months.

In last month’s pension email, we discussed the likelihood of pension rates continuing to drop and our assessment appears to be occurring as predicted.  This means if you are looking to retire or separate from BP towards the end of this year, you will likely want to wait until at least November (and likely December) to collect your pension benefits.

Understanding how your BP Retirement Plans work and how making the proper benefit selections can dramatically affect what you receive is what we specialize in.  To discuss your personal situation with one of our experienced financial advisors who specialize in knowing your BP Retirement Plans, simply call our office at (877)739-6007 or send an email to info@capstonewealthadvisors.com.

Regards,

Capstone Wealth Advisors

Bellingham, WA

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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