I do want to write a whole post on deciding whether to take a pension early.

The short version is that you can figure out how long you have to live to make postponing the start date the best choice using a financial calculator (such as I linked to above). Basically, a stream of income that begins on one date (when you start taking the money) and ends on another date (when you die) has some value. The value you care about is the Present Value (what you'd be willing to pay to get this stream if income, or what the fund would be willing to pay to buy it off you--if their rules allowed it). You can solve for the Present Value if you know the other values: the Payment, the Number of payments, the Interest rate, and the Future Value.

In this case, the Future Value will be zero (because the money stops when you die) and you can use the same interest rate in both your calculations (use the rate you could get on some safe investment). For the Payment, use whatever the company told you you could get. For Number of payments, use however many months are between when you might start taking the money and when you might reasonably expect to die.

If you go through that exercise, with a bunch of different values, you can roughly figure out how long you have to expect to live before it makes sense to delay taking the money to get the higher monthly amount. (That is, the longer you wait, the fewer months you end up collecting, assuming that you die at the same age either way.) If you expect to have an average life span, it probably comes out to about the same thing. If you expect to die early, you might as well get the money early, even if the payments are small. If you expect to live to a ripe old age, delay long enough to get the maximum payment.

As to putting the money into an IRA, you can do that as long as you have some earned income--you can only put into an IRA income that was paid to you for work that you did. I don't think it matters if you're taking a pension too.