New Form W-4P and Flat Dollar/Percentage Withholding

In the past many retirees have used the old W-4P (or home-grown substitute forms) to elect a flat dollar amount, or flat percentage of withholding on their periodic benefit payments. The new Form W-4P allows them to elect an additional withholding, but does not appear to allow the flat dollar or percentage approach. 

(As an aside, the new W-4P has been very confusing to the retiree population.)

Questions:

1. Can an administrator continue to allow participants to modify the W-4P and elect a flat percentage or dollar amount for withholding? I saw an update from Empower suggesting that the flat percentage or dollar approach was not acceptable even with the older W-4P forms and that if participants don't file a new W-4P then they will be converted to the default of single with no adjustments. 
2. What is the potential penalty if an administrator insists on allowing a flat dollar or percentage withholding?

Thanks in advance.