That shouldn't be a problem. Why go through the time, effort and expense to terminate the PSP and immediately start at 401(k) when, when it takes about a hour of work to just amend the current plan to allow a CODA and maybe some match and/or SH contributions?
If the new record keeper won't do that, find a new record keeper.
That's a joke, I say, that's a joke, son! I’ve never seen a document include language suggesting a participant go fly a kite either. Although it might have been fun to slip it into one BITD when we did individual DL submissions, just to see if it got thru.