BP Employees,
Interest rates used to calculate your BP RAP were noticeably higher than our forecast last month, particularly the 2nd and 3rd corporate segment rates showed a significant increase over the previous month.
The increase largely reflects a broad shift taking place in the bond market. Economic growth continues to come in stronger than many expected, while inflation remains stubbornly above the Federal Reserve’s target. Those conditions have pushed interest rates higher and ultimately led the Federal Reserve to raise rates by 0.25% at its September meeting, its first rate increase since 2023.
Looking ahead, the market is increasingly expecting that this may not be a one-time move. Chicago Mercantile Exchange Futures market pricing is currently suggesting there is roughly a 70% probability that the Federal Reserve will raise rates by at least another 0.25% at its next meeting in October.
We are also seeing this pressure further out in the bond market. The 30-year U.S. Treasury yield recently reached 5.45% (as of September 24, 2026), its highest level since 2007. Longer-term rates have been steadily moving higher as investors factor in continued economic growth, persistent inflation and the possibility that interest rates may need to remain higher for longer.
For BP employees approaching retirement, this makes the timing of your pension election especially important. Higher interest rates generally reduce lump-sum pension values, but the impact depends on your age, Benefit Commencement Date and which interest rate segments apply to your calculation. Even relatively small changes in rates can result in meaningful differences in the value of your pension.
With interest rates moving again and the Federal Reserve potentially entering a period of rate increases, we believe it is increasingly important to understand how these changes affect your specific pension before making an election.
If retirement is on your radar, we encourage you to review your options before making a decision. BP filing deadlines arrive sooner than many people expect and understanding how changing interest rates affect your pension can help you make a more informed decision.
At Capstone RIA, we help BP Employees understand how interest rates can impact pension decisions and broader retirement planning strategies. If you would like help reviewing your situation, feel free to reach out to us at info@CapstoneRIA.com or call us at 877-739-6007.
Best wishes,
Capstone RIA
Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
Capstone RIA and its representatives are separate and apart from BP or Fidelity Investments.
