ATTN BP Employees,

Updated interest rates that impact your BP Pension (BP RAP) have been released. For a clear understanding of these changing rates, please find attached our interest rate chart detailing the current interest rates influencing your BP RAP and our predictions for where they may head in the future.

What You Need to Know:

  1. Interest Rates used to calculate your BP RAP pension significantly increased this month, negatively affecting your pension lump-sum value. We expect these rates to taper off and decline next month.
  2. What Does this Mean for You? If rates decline, they will likely still be above the interest rate cap outlined in the BP RAP rules, meaning little change in your lump sum value is likely. However, we do strongly encourage you to contact us to discuss the impact these rates could have on your BP RAP and your overall retirement goals. We can help you understand the best option for your long-term retirement planning needs.
  3. Why are the Rates Changing? Bond interest rates are fluctuating due to the Federal Reserve’s recent decisions to keep interest rates steady. The Fed’s pause on rate hikes reflects its acknowledgment of a robust economy, but with an eye on the rising cost of borrowing that could slow down economic activity in the future. While future rate increases remain possible given inflation concerns, the current data suggests the Fed may opt to maintain rates as they are, especially if inflationary pressures continue to ease. The market’s reaction to the Fed’s policy suggests a softer outlook, meaning that there is less expectation for aggressive rate hikes in the near term, and even the possibility of rate cuts in the longer term as the Fed closely watches economic indicators and adjusts its policies accordingly.
  4. What’s Next? Currently elevated rates may stay high for a longer period, however, substantial economic events like a highly anticipated US recession, could alter this outlook.

Need Some Guidance?

If all of this feels a bit confusing, don’t worry. We’re here to help! Our team of financial advisors is well-versed in all things related to BP retirement plans. Whether it is the BP RAP, ESP, SVP, RRSP, or any other BP-related plans, we’ve got you covered.

Want to learn more? Simply email us at info@capstonewealthadvisors.com or give us a call at (877)739-6007.

Best wishes,

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.

Stock investing involves risk, including loss of principal. International & Emerging Markets investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in Emerging Markets.

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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