Advantages:

• You can roll the money into a traditional IRA within 60 days and continue to defer income taxes.
• You may convert the traditional IRA to a Roth IRA and enjoy tax-free growth and distributions (however there are potential taxes due from conversion).
• You have your money in hand and thus don't run the risk of dying prematurely and losing all of your future annuity payments.

Disadvantages:

• You have to actively manage your pension amount.
• There is a large up-front cash drain to pay income taxes on the entire distribution if it is not rolled over to a traditional IRA or other eligible plan.
• Depending on how the money is invested, future earnings on the amount distributed may be fully taxable.
• Distribution may be subject to the claims of creditors in the event of personal bankruptcy, even if rolled over to an IRA.

IMPORTANT NOTE: When you leave your job, one decision to make is whether the investment managers or investment opportunities through your employer pension plan are better than those available to you through an IRA rollover. Keep in mind that the investment management of your prior employer's pension plan may change, so monitor your investment performance to make sure your investments are still meeting your objectives.