By Sandra Block
From Kiplinger’s Personal Finance
Many employers that provide defined-benefit pensions offer employees the ability to take their pension as a lump sum instead of an annuity.
Employers like this option because it gets the pension liability off their books, and some retirees prefer the flexibility a lump sum provides. If you’re considering taking a lump sum and there’s an offer on the table, you may need to act before year-end to get the most out of your nest egg.
Lump sums are typically calculated based on the present value of guaranteed monthly payments, using mortality tables and interest rates published by the IRS. Under the formula pension plans use, the lower the interest rates, the higher the lump-sum payout….