I worked at the University of Wisconsin part-time briefly, before Gov. Scott Walker's reforms. As a result I have about $2000 in the pension system, $1000 that I was required to contribute and $1000 of employer matching. I can either take a separation benefit and get my $1000 (plus a few years' worth of interest), or I can leave it there earning decent interest rates (4.8% in 2010) until I am 55 (roughly 25 years from now) and withdraw the whole $2000 plus earnings. It's a fairly small amount of money that I don't need right now, but I am wondering if it would be better to take it out without the employee match, move it into an IRA, and then invest the money myself where I should be able to earn more. The historical return of the S&P 500 is somewhere in the 5–10% range as far as I can tell.
The straight math might favor leaving it, but I'd personally prefer to have it in my control in an IRA. My own employer offered a buyout on the pension program, and the choice between a nice lump sum vs some fixed number 20 years hence was a simple one for me. Both my wife and I (same company) took the lump sum, and never regretted it.