Re: Cash Balance Withdrawal
You should check your 401(k)'s Summary Plan Description (SPD) for rules governing withdrawing money. Each plan usually has its own quirks. If you're still confused, call the company that administers the plan. You may want to do this anyway, just to double check.
In your cash balance plan, I think any SEPP issues should not affect taking the money as an annuity. Again, read the SPD for the pension plan. Each plan is different. I think SEPP only applies to withdrawals from IRAs (but I could be wrong).
If you want to take the pension money as a lump sum, and you can take withdrawals penalty free from the 401(k), why not avoid having to deal w/ the SEPP, take withdrawals from the 401(k), and either let the cash balance grow in the pension plan or roll it over into an IRA and wait until 59 1/2 to take withdrawals?