The company is not offering this for his benefit. They are trying to reduce their pension responsibility as cheaply as they can. You need to figure out how they are calculating the lump sum amount, and how that discounted value compares to the pension he would receive. How much he would receive, at what age, and whether the pension is COLA'd are all important considerations. The health of the company is also an issue.
The way that they are calculating the lump sum payout is:
$708.60 Age 65 Single Life Annuity
X87.8747 Present Value Factor-what is this?
$62,268.01 Lump Sum payable 12-1-15
If he doesn't take the lump sum, and at age 65 started receiving $708.60 per month for, say, 25 years until he dies at age 90, then that equals 708.60 X 25 X 12 = $212,580.
My husband has read through the whole packet, and there is no mention of cost of living adjustments.
He did, however, find this little nugget buried in the pages: "Please note that the IRS is expected to publish a new mortality table for calculating lump sum payments. It is anticipated that this table will generally reflect longer expected lifetimes and possibly result in larger lump sum payments. This table is expected to be effective for lump sums paid in 2017. As a result, it will not apply to the lump sum currently available as part of this offer."
We have received these "one-time" offers from them for the last few years. However, this is the first year that they have actually sent a packet of information also.
So, my husband is leaning toward NOT taking the lump sum payment. I was thinking of this money as just sitting there being lazy and not earning any interest. I thought we should take the money and make it start working for us.