<prompt> Human: I worked for a non-profit company based out of Scottsdale, AZ for 7.5 years from 1990-1997. They had a pension plan, in which I became fully vested after 7 years. Since then, I have received annual updates concerning the plan. I worked for a non-profit, so the money I was going to receive during retirement wasnt huge, but it was something. I have lots of savings in my current 401k plan and a Roth IRA, so this is not my only retirement plan. I recently received a letter from Transamerica Retirement Solutions offering me a limited time opportunity to elect a lump sum payment representing the value of my vested accrued pension benefit under the Plan. I have the option to: receive the money in cash transfer it into a 401k or eligible IRA take an immediate annuity which pays 65mo. for the rest of my life and a smaller amount to my wife if she lives longer than me. This seems like the weakest option to me and my wife.FYI: The lump sum value is 19,300.Im looking for a bit of advice and have a few questions.1. Why would my former company offer this lump sum payment option? Is there a benefit to them?2. If I leave the money in the pension plan, what kind of rate of return will I earn? Is it lower than I could get by simply putting it into an Index fund in a 401k or IRA? 3. Is there any risk to leaving the money in the existing Pension Plan? 4. The paperwork I received states that if I take the lump sum payment in cash, the company will withhold 20 for federal taxes. I am assuming that this is not the full amount of tax that I will owe, since I am in a higher tax bracket normally. Correct?Here is what I am considering:A Take the lump sum payment. Pay off my car I owe about 14k. Buy a slightly used, new-to-us minivan for my wife. Our current minivan is 14 years old with 175,000 miles, so this is something we have been planning for. However, we dont want 2 car payments, so we have been holding off on this purchase. B Transfer the money to an IRA or 401k for future retirement needs. This is kind of my preference. TIA for any and all help. Im willing to make some calls and do some legwork, I just need to figure out what questions to ask, who to ask, and how to evaluate my options.  <response>: Why would my former company offer this lump sum payment option? Is there a benefit to them?Its probably calculated to be cheaper for them in the long run.If I leave the money in the pension plan, what kind of rate of return will I earn? Is it lower than I could get by simply putting it into an Index fund in a 401k or IRA?This is a defined benefit plan, isnt it? Do you know how much youre slated to get every month?Is there any risk to leaving the money in the existing Pension Plan?Yes. The company can go bankrupt, in which case the payment of the pension falls to the Pension Benefit Guaranty Corporation PBGC This is anecdotal and is really the extent of my knowledge regarding this, but my dad was anticipating a pension of 2500 a month after working thirty years at a steel mill. They went bankrupt a few years before he reached that mark, and his pension from the PBGC is about 40 of that.The paperwork I received states that if I take the lump sum payment in cash, the company will withhold 20 for federal taxes. I am assuming that this is not the full amount of tax that I will owe, since I am in a higher tax bracket normally. Correct?That appears to be correct. Here is some more info on taxes on lump sum retirement distributions.Again, need to know your expected payout in retirement assuming the company stays solvent to provide any useful advice. 