To the stability part, I'd also add you need to know what "protections" there are in case of default, too. With a lump sum pension, below a certain level PBGC may cover 100% of the payouts for the rest of your life, whereas with an annuity, failure of an issuer provides limited recourse (in Texas, for example, an annuity would be protected up to $100K of cash value, I believe, so any annuity below that value is "safer" than one that exceeds it).IMO, the "lump sum or monthly check?" question has the same inputs as the "should I buy a private annuity?" You consider your health, your preferences for "controlling the money", concerns about major expenses, and concerns about the stability of the monthly income provider.
That's the first thing I'd check, you can do it online yourself. What $/mo annuity will the lump sum buy (or vice versa)? In my case, they're almost exactly the same with my former MegaCorp. If you find in your case that one is more generous than the other (usually the bias seems to be toward monthly), that would be hard to ignore. The only thing that would trump that IMO would be company stability, if that's suspect to you, I would go with the lump sum for sure. Best of luck...Sometimes the lump sum and monthly income are not actuarially equivalent. My pension was dramatically biased in favor of the monthly income.
Personally I like the three legged stool concept of retirement. If I already had a fairly decent balance of personal retirement savings, I probably wouldn't be too inclined to take the lump sum instead of the pension unless the math made it a no-brainer (not likely) or the company and its pension plan were on very thin ice.Giving away a guaranteed lifetime income is difficult. I considered it with one of my pensions a few years ago, but after doing some research I decided to stay with the income. Now that the market has tanked, I feel good about my decision and will appreciate receiving that monthly check starting in November.
Do you want the security that an income stream brings or do you want to take your chances.
Some pensions are tied to health benefits so if you opt for the lump sum you lose the health benefits .
I'm a NJ resident and will have to decide lump vs. monthly a few years from now, so that's for that valuable piece of information!... many states don't tax pensions payed out monthly, as opposed to a fixed annuity bought later. NJ doesn't tax the first $20,000...
......... the employer by law must provide for cost of living increases, whether it's a lum-sum payout or annuity.