Depends. Is the Pension stable, fully funded and conservatively managed? Is it safe!
You can compare your pension payout against a commercially available annuity to determine what it would cost to purchase the equivalent today (need to factor in abnormally low interest rates).
The lump sum calculation seems to be defined by the Pension Protection Act of 2006. Looks like to calculate the lump, the yield curve is broken up and the annuity payout discounted.
IRC §417(e) prescribes the interest rate and mortality table that plans must use to
determine the minimum present value of an annuity, and thus the minimum value of a
lump-sum distribution that a participant who elects to take a lump sum is entitled to
receive from the plan. Section 302 of the PPA amended IRC §417(e) to replace the
30-year Treasury bond interest rate with a corporate bond interest rate as the rate to be
used in this calculation.2 The PPA requires plans to use interest rates that will be derived
from a three-segment “yield curve” of investment-grade corporate bonds to determine the
minimum lump-sum value of an annuity.
IMO - Assuming one is healthy, the annuity would be my choice to cover longevity risk. But it all comes down to the detail and your options. The analysis is more complex than is apparent. You need to consider mortality, comparable investment returns (with a similar risk profile), etc. You are going to try to predict the future on several complex issues.