If the monthly income from your pension is really small, it’s likely the company/plan is trying to reduce their expenses by pay out these participants to get them out of their books. It could be mandatory if the value of your benefit is under $5k. Otherwise, you’re given the option. consider comparing the value of (1) taking the lump sum and investing it against (2) your monthly payment.

Your lump sum is likely based on 417(e) rates and mortality, therefore based on historically low interest rates, which means the lump sum value is relatively higher. To the extent these rates go up (changing annually), that’ll factor into decreasing your lump sum. However as you age towards the plan’s Normal Retirement Age (usually 65), the value increases for aging. So these are possibly offsetting variables. It’s also possible rates will stay low for at least the next year or two, so this may not be a concern.

Whatever the case if you take that lump sum, roll it over to an IRA and invest appropriately, it’s possibly you can out-earn the value of your benefit compared to not cashing out. But if you are fearful of the economy, you might be fearful of markets to produce the returns you want or need to beat the option of not cashing out.

If you lump sum is really small, it may not be worth the hassle.

Just speaking from a mostly financial perspective - as there are lots of personal reasons that could help you make a decision that makes sense for you.

As to the fear of economy and ultimately losing your lump sum: if it’s covered by the PBGC, you’ll likely be fine. If this is coming from a multiemployer plan, you might have a bit more to worry about since the PBGC for these plans is likely to go insolvency around 2025 or so (absent legislation that would address their insolvency issue). If your benefit is from a single employer plan, the PBGC is in a good position to insure your benefit if your company goes under and that pension plan needs to utilize the PBGC as insurance to cover participant benefits. PBGC funding/coverage is separate between multiemployer and single employer plans.