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The most accurate way to value a pension is to compare it to what a commercial insurer would charge for the same monthly life annuity benefit. If you have a Gov't inflation-adjusted pension, comparing it to commercial life annuity with a 2%-3% annual adjustment should be pretty close.
This is really the only "correct" way to do it. Using the 4% method is interesting for comparison, but inaccurate--with a pension or annuity, the money flow stops when the pensioner/annuitant dies (or when the second of the married couple dies, if you chose that option in both the pension and annuity). But, with the 4% rule, you not only have a large chance of having money left over, there's a decent chance of passing away with more (or raising your spending over the years).

No, it is just another correct way of calculating it. If one isn't interested in pass-alongs or left overs, or What-if-Russian-Roulette-pays-big? then no you would not have to take those things into consideration. If I want to know how much cash-on-hand I need to pay myself what the pension is paying me the rough-cut 4%-rule is as close as anybody needs to be. Unless you also want to know other stuff which may or may not be of any relavence to the calculatee.
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