You can't "declare" a pan - there is no such thing. A pan call is just an urgent message, nothing more.
You CAN, however, declare an emergency, using mayday.
Should you declare an emergency with an engine failure?
Answer, a couple of reasons to declare an emergency at all:
- When you can't adhere to the clearances given by air traffic control
- When you immediately need to do something different that what you were cleared.
E.g. emergency descent. You call mayday to let the air traffic controller know, that you will be descending no matter what. He will the be able to assist your decent by getting other traffic out of your way (hopefully).
Same for an engine failure during departure. Most likely you will fly a contingency procedure instead of your originally cleared SID. A mayday call, will let the controller know that he needs to keep other traffic clear of your way. Good communication will ease the work of the controller (see Thomson on youtube for a well executed example -
https://www.youtube.com/watch?v=9KhZwsYtNDE).
Calling pan will not give you anything at all. Pan is just a message that takes priority over other radio calls. You don't get any priority over other traffic, and it doesn't allow you to deviate from your present clearance.
Since the misunderstanding about what a pan call really is and means, is so ingrained, calling "pan" and anything the controllers will interpret as an emergency will give you the same privileges as calling mayday - still doesn't make it correct.