NEW YORK (CNN/Money) - President Bush on Friday announced a sweeping plan to protect the retirement savings of U.S. workers that would give them more control over investments in their 401(k) plans and provide more financial advice.

The plan, drafted in response to public outcry after Enron employees lost more than $1 billion in company stock in their 401(k) plans, will allow workers to sell shares in their plans after three years. Enron and many other companies have required workers to hold company stock for years (in Enron's case, to age 50).

As part of the plan, which requires Congressional approval, so-called administrative "lockdowns" would also be heavily regulated. Companies would have to give 30-day notice and executives would be held responsible for investment losses during the shutdown.

The president did not give details on how the new rules would work. Current law does not regulate lockdowns.

Another part of Bush's plan is that if the rank-and-file cannot sell their shares, then top executives wouldn't be allowed to sell either. With Enron, top executives were able to bail out of the stock as employees watched helplessly while the stock in their 401(k) went from the $30s to pennies during an administrative lockdown. The executives weren't selling shares from their 401(k), but the Bush plan did not address that discrepancy.

"It will level the playing field," Secretary of Labor Elaine Chao said on CNNfn's Market Call. "It will give American workers choice, confidence and also control."

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The Bush proposal came after a three-member task force appointed by Bush launched a review of pension laws. The task force included Chao, Treasury Secretary Paul O'Neill and Commerce Secretary Donald Evans.

Bush made the announcement at a GOP event in West Virginia.

"About 42 million workers have 401(k)s with $2 trillion in assets. That's a critical part of retirement security," Bush said.

The reforms don't go as far as proposed changes by Washington lawmakers. In one bill, Sen. Barbara Boxer, D-Calif., and Sen. Jon Corzine, D-N.J., proposed a 20 percent cap on company stock. Employees would be able to sell shares after 90 days under the Boxer/Corzine bill. Companies would also lose half of the tax benefit of contributing stock, in order to encourage businesses to contribute cash instead.

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Another proposal, by Rep. Gene Green, D-Texas, and Peter Deutsch, D-Fla., would put the limit on company stock at 10 percent, but only on employee contributions. Both proposals are pending.

Groups representing the interests of companies praised the president for taking a less severe approach to the issue of company stock in 401(k)s. The corporate lobby objected strongly to imposing stock limits, arguing it would discourage company contributions and cause too many headaches.

"We applaud the fact that the president has rejected the rigid caps on the percent of company stock that can be in a plan," said Jim Klein, president of the American Benefits Council, a lobbying group representing big companies. "He's put out some proposals that are more reasonable."

Still, Klein said the idea of making executives responsible for plans during lockdowns would need careful review. "It's an area where it's going to be really important to get the details right."

A final piece of the Bush plan would give workers more access to financial advice to help them make decisions. Right now, most companies do not offer much advice because of liability fears.

The House last year approved a plan proposed by Rep. John Boehner, R-Ohio, that would remove the threat of liability and allow companies to provide employees with financial advice. A Senate version by Sen. Jeff Bingaman, D-N.M., would go a step further, requiring that the advice be from an independent third party -- an institution other than the plan administrators selling investing products.

Ted Benna, president of the 401(k) Association who is credited with creating the 401(k) more than 20 years ago, said he's glad the president is tackling reform, because change is long overdue.

"Clearly we have to make some changes," Benna said.

But Benna believes there should be a limit to the amount of company stock that an employee can put in a 401(k) plan. Limiting the portion that employees can contribute would help prevent plans from becoming over-concentrated in company stock. Some plans have weightings of more than 80 percent (see "The 'Enron Problem'").

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