Mandatory Distributions

This is a very rare occurrence for us but I need clarification.

Participant terminates employment after attainment of the later of age 62/NRA and has balance say of $3,000.  Participant does not respond to distribution communication provided to them.  The plan provides for the standard provisions of mandatory IRA rollover <$7,000 but cash-out if <$1,000.  The plan also appears to say that a terminated participant who has attained 62/NRA is not to be rolled to an IRA but instead provided a lump sum distribution.  That doesn't seem helpful to a person of retirement age.

Is my understanding correct.  Thank you!

A rollover is a lump sum distribution. 

An annuity stream is not a lump sum distribution. 

The force out distributions above $1,000, if done as a lump sum, go to a force out IRA, not as a cash directly to the participant.