Option 1 is a default strategy whereby the investment risk is gradually reduced as you get closer to retirement. It suggests that you will have a minimum of 25% invested in Cash at retirement so as to fund the retirement lump sum (25% of total fund). The remaining 75% is only then used to provide a pension income (perhaps via an ARF).
Option 2 is where you can decide on the investment mix as you go along. You decide what mix of funds and what level of investment risk you are comfortable with. But I suspect that you can switch to the default route at any time.
It's really down to whether you want to determine the investment strategy (option 2) or leave it all up to the investment manager (option 1). In my opinion, with over 25 years to go to retirement, I would opt for a higher risk strategy (high Equity content) in the earlier years. It makes sense to reduce the investment risk as one gets closer to retirement (say within the final 5 to 7 years).
As regards moving to another EU country, whilst in theory a transfer of assets is possible, in reality - at least at present - this is not so easy. But I suspect this will become easier over time. In any event you can always leave the assets here and draw them down when you do retire.