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Putting this into an annuity calculator, and assuming a life expectancy of 20 years, the company needs a 5.67% return to pay you the pension. I think most pensions are allowed to use an 8% return, which allows them to put less into their pension, in return for greatly likelihood of defaulting later. Who gets 8% these days? So, I'm thinking they are giving you a less than 20 year life expectancy to make it work.

So your question is whether or not you can find something that will pay you about 7% forever. That puts you into something like KMP, a pipeline partnership. They currently pay about 6%, but increase their dividends each year. The last few years, it's increase only 2% or so, but over the last 10 years it doubled (avg 7% or so).

The question is, what risk is greater, inflation or doing your own investing?

I think inflation is a big risk. One way to fight that is to save part of your pension payment. But even saving that in a "safe" interest paying account won't beat inflation right now, much less what is coming down the pike.

My choice was to pull what cash I could out of my pension, and look for ABCD investments, Anything Bernanke Can't Destroy.

Seekingalpha.com has some dividend oriented contributors, like Dividends4life or David Fish that have good articles on the why & how of dividend growth investing.

The question is, what risk is greater, inflation or doing your own investing?

Great question. My wife is concerned there isn't anything safe. Whereas I tend to think some things may be safe, but I'm not sure what they are. Am I hearng you say these dividend growth instruments are "ABCD?"