Couple of things.

The lump sum always sounds good but Ted needs to determine if the amount of transfer (to a locked-in retirement savings plan) exceeds the maximum tax-sheltered transfer value. If it does the excess will be paid in cash and taxed as income.

Also is JS60% the only option? JS60% is the default in Ontario at least but normally DB plans also have the option of JS50% (which the spouse must agree to) and JS75% and JS100%. The reduction in pension for JS75% and JS100% is not as large as one may think.

Regardless, I disagree with advisor and would recommend that  Ted takes the DB pension. Best financial decision I ever made and my lump sum payout was well more than double Ted's, I also opted for JS75% which kept the missus happy. 

Remember, albeit with no inflation protection, the DB money is going to come in no matter what, whereas to generate a 4% return or whatever on investments has a risk element. (Of course, if the DB is from an iffy company take the lump sum).