Specifically, I was given the option of an immediate lump sum payment of ~$72K. Otherwise, I could elect to take a lump sum when I leave the company or keep the pension and begin receiving an annuity of ~$20K/year in the year 2040.

One way to look at this: what investment return would you need on the $72,000 such that in 25 years it would generate $(20,000/12)/mo?

In other words, solve [$72,000 * (1 + i/12)^(25*12)] * i/12 = $1,666.67 for i.

Comes out to 6.09%. If you think you can do better, take the lump sum. If you are satisfied with that return, take the 2040 annuity.

The interest hurdle is lower if you plan to deplete the principal over time, so another way to look at this: what investment return would you need on the $72,000 such that in 25 years you would have a "reverse mortgage" over, say, 20 years that would generate $(20,000/12)/mo?

In other words (using Excel's PMT function), solve PMT(i/12,20*12,-72000*(1 + i/12)^(25*12)) = $1,666.67 for i.

Comes out to 5.02%. If you think you can do better, and don't mind depleting the money over 20 years, take the lump sum. If you are satisfied with that return take the 2040 annuity.

Note that all interest rates discussed here include inflation - however much that will be.