I have run the numbers as provided by RockOn (more or less) and although I have some minor questions about his methodology, the IRR that I get is ~5.96%. This seems within spitting distance of 6% to me.
I couldn't get an instant quote from the Vanguard site for 1 million, so I used 100K figuring on proportionality. I couldn't get a COLA of 2.8%. I used the COLA button with unknown future CPI changes (this run yielded IRR=5.53%) and 2 runs with graduated payments of 2% and 3%. These yielded the 5.96%. A fixed payout with no COLA yielded 5.93%.
I used excel w/IRR function starting with an inital payment of 100,000 and annual annuity payments from the various quotes for ages 55 - 86. My HP 12c calculator won't accept more than 20 uneven cash flow entries so I don't know how it can be used for calculations of that many COLAed yrs (and punching in all those numbers would be tedious). Quick and easy w/excel.
I have no opinion one way or another on this issue. I have no need for an annuity in addition to our STRS pensions. Others might find some value in it.
CFB, have you already hit the red button? I'm wondering about your comments. It is what it is.
I learned something, I didn't know excel had that function. I usually use my HP, don't remember the model, it's the slightly upgraded business model. Excel from now on!