The growth of the 401(k) retirement plan in the US has been a triumph of popular capitalism. Employees piled into the stock purchase plans, encouraged by employers happy to cede responsibility for pensions and keen to maximise the incentive for workers to own company stock.

The financial virtuosity of the plans was almost uncontested - until the Enron debacle. The company's employees were trapped with rapidly evaporating Enron stock in their pension plans while senior executives had sold stock and options long before the fall.

President George W. Bush, conscious of the tales of employee destitution aired nightly on television, has proposed that workers should have more flexibility in handling their portfolios. He suggests employees should be able to sell company stock after holding it for only three years, instead of the decades demanded by some companies - including Enron.

He is opposed to caps on the composition of these portfolios. Employees can choose the stocks in their 401(k), though employers encourage investment in their company by providing matching stock. In some plans, and in Enron's plan in particular, 90 per cent or more of the portfolio can be a single stock.

That is hardly the kind of balanced investment designed to ensure a contented retirement. These plans may not have been intended to be the cornerstone of the country's pension system but they now play an important role. The government recognises that role by providing tax incentives for the plans - and with that comes a responsibility to invest sensibly.

Immediately after Enron's collapse there was public support for low limits on the amount of any individual company's stock that could be held in a 401(k); but that moment has passed. There is a realisation in Washington that making the plans more complex to run will mean fewer companies are willing to sponsor them.

Technology can simplify that process. Portfolio management software can provide regular alerts to employees when their retirement plans become un-balanced - and more than 20 per cent in a single stock is unbalanced. Employees should be required to sign a release when that percentage exceeds 20 per cent and at every multiple of 10 up to 50 per cent, at which point a cap would be prudent.

Restrictions may not be popular in a country that ranks freedom of investment not far behind freedom of speech. But employees and employers have a social obligation to make a distinction between the thrill of punting on the stock market and the responsibility to plan for retirement.