Self employed

When I fill out the online form on this transfer to Roth IRA, I see three options:

1) default federal tax (20%) 

2) fixed percent (must be above 20%)

3)do not withhold taxes

So, when I asked my pension compay, they say if I choose 1), the ACTUAL l amount to transfer to my Roth IRA is $20,000 ( $5,000 withheld).

This is where I got confused. According to your explanation, my pension company withholds $5,000 to pay for federal taxes later, but the actual amount to transfer to Roth IRA  is still $25,000, not $20,000 now?