Client has 401k of about 490k (no stock)

But included with that is approx. 50k in NQ money (no stock)

we are rolling over the 401k money to an IRA.

However, with the NQ money:

a. do we roll over into a NQ annuity since their is gain?

or

b. can he just take the NQ money out as a check to him and pay no tax on any of the gain since it was included in the 401k?

Thank you,
Douglas