Can the ESOP distribution rules be changed later on in the plan to make them more restrictive or would this violate "anti-cutback" rules?

Within limits, this is possible provided the changes are made in a non-discriminatory fashion. The "anti-cutback" rules prohibit sponsors of ERISA plans from reducing promised benefits. Companies cannot lengthen the vesting schedule, for instance, for people already in the plan (but they can for new participants). An ESOP sponsor can, however, change from a lump-sum distribution to an installment distribution or change the form of the distribution from stock to cash if the company's by-laws require that all or substantially all the stock be owned by employees or the company is an S corporation. If a company goes public, the put right can also be eliminated. Whether companies can also change the timing of distributions, such as from one year after separation to five years, is less clear and experts do not agree on this issue. Some companies have done it, but some lawyers worry that the IRS has not specifically sanctioned this as an allowable exception to the anti-cutback rule. It may be more practical to limit any extension of the timing of distributions to non-vested participants. In any event, changes must be made with advice of counsel.

However, note that participants with at least three years' of service have the right to have their benefits calculated under a plan's existing vesting schedule if the plan is changed to amend the vesting schedule.

For more details, see Creating a Sustainable ESOP Distribution Policy

Link to this FAQ Topic: Distributions & Repurchase