Unless the distribution can be rolled over to a traditional IRA it will be taxed as ordinary income.
Yes, you could rollover the lump sum distribution over to an IRA using a direct rollover to an IRA with a trustee to trustee transfer. If the pensions funds are paid directly to you, you have 60 days to complete the rollover, however, to avoid being taxed on this rollover, you will need to make up the taxes that were withheld from your personal savings in order to avoid being taxed on the difference between the distribution and the taxes withheld. As an example, if you received a $100,000 distribution, and $20,000 in taxes were withheld, you would have received a net amount of $80,000. You would have to still rollover $100,000 to an IRA in order to avoid taxes on the rollover. If you only rollover $80,000, then you will be considered to have taken a distribution of $20,000 that will be considered taxable income.
More information is here at IRS Direct Rollover