Lump sums are tempting. Your employer likely has offered what looks like a large amount of money to replace your monthly pension payment. Doing this has a lot of benefits to your employer and puts a lot of risk on you. Federal law requires the calculation of a lump sum payment to use certain standard calculations.
Before deciding what to do, you should consider how stable your employer’s pension plan and your employer’s business are. If both are secure, you may be better off staying in the pension. You should also consider how investment savvy you are. Can you control your spending and saving enough to make that lump sum payment last long enough to provide for you and your dependents for the rest of your life?
You should also be aware of whether your pension provides for survivor’s benefits. If it does, your lump sum may not take that into consideration, and you could be giving up your spouse’s benefits. The result is almost always that you will receive less money and possibly less stability by accepting a lump sum instead of continuing to receive your pension payments.