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I doubt it will surprise anyone, but I pick door A. There is nothing in published guidance prohibiting mid-year changes to the PS allocation method simply because the plan is a 401(k) SH. While I have heard some ASPPA speakers claim there is a total prohibition of mid-year amendments to SH plans (except for published exceptions), I've never heard anyone with the IRS make that claim. Quite the opposite, we have a growing list of mid-year amendments to SH plans that the IRS has informally stated are ok. If you read 1.401(k)-3(e)(1), it is very specific about what provisions can not be amended mid-year. It is also clear that adopting an improper mid-year amendment means that the plan does not satisfy 1.401(k)-1(b), which is a qualification requirement. If the IRS has really taken the draconian position the ASPPA speakers claim, there should be thousands of disqualified plans by now.