At GuideOne Insurance, employees receive semiannual updates on the financial markets and how the economic climate may affect their investment decisions.

Afterwards, they may also schedule a one-on-one meeting with an investment adviser to discuss their progress toward meeting their retirement and other financial goals.

Ensuring that the process is considered “education” and not “investment advice” has always been a fine line to walk, said John Roberts, GuideOne’s senior vice president of human resources. If it were judged to be the latter, the company could be subject to lawsuits from employees who believed they had received bad investment advice.

Under provisions of the Pension Protection Act of 2006, which was signed into law in August, employers such as GuideOne will, beginning Jan. 1, be allowed to provide specific investment advice to their employers without that potential liability if they follow strict guidelines.

“The benefit of (the new law),” Roberts said, “is that they can counsel employees to ask: ‘Do you have enough life insurance?’; ‘Have you considered fixed or variable annuities or other choices?’ The advantage of financial counseling is that people can broaden out to (ask about) other areas of their lives.”

Some financial advisers, however, say the new law is creating more uncertainty than answers and are waiting on the U.S. Department of Labor to provide further guidance that’s expected to be issued sometime in 2007.

The Pension Protection Act created two routes for investment companies to follow: either provide third-party advice through a computerized investment selection model, or provide the advice themselves, subject to a rigorous audit process.

Craig Johnson, vice president of the West Des Moines office of Wachovia Securities, said it’s still “very much unclear” to investment advisers how the new guidelines will play out.

“Obviously, you’ve got the computer models that are acceptable, but there hasn’t been a lot of guidance provided,” he said. “So it’s premature to sit down and say, ‘This is what’s going to happen,’ because we don’t know yet.”

Until the Labor Department issues clearer explanations, “I wouldn’t say that anyone is trying to take the lead on this,” he said. “I think most investment firms are taking a wait-and-see attitude.”

Some financial planners are already cautiously providing guidance to employees. Once each month for the past three years, Johnson schedules a full day at ITAGroup Inc.’s headquarters in West Des Moines. The voluntary one-on-one financial planning sessions are provided by ITAGroup as a paid benefit for its employees. Through that process, Wachovia provides a “very focused, educational” approach for explaining investment choices, Johnson said.

“We really try to make sure the individuals understand what’s happening with their accounts and understand what the potential ramifications are of making changes to their accounts,” he said. “There’s no question that in the end, an individual still has to make up their own mind whether they’re going to do something or not.”

GuideOne, which offers a menu of 23 investment choices under a 401(k) plan administered by Principal Financial Group Inc., brings in investment advisers from Holmes Murphy Financial Services to provide a worksite education element for its plan.

“If you talk to an employer about advice, all they’re concerned about is that their employees are getting some help,” said Jim Pierce, executive managing director of Holmes Murphy Financial Services. Pierce said his firm will “certainly consider” providing specific investment advice once the Labor Department clarifies the rules.

However, “we’re not convinced that the answer has to be specific investment advice,” he said. “We believe a strong education strategy can be valuable for employers.”

Pierce said he thinks the third-party route that uses computer models will be dominated by large companies such as Principal Financial Group Inc., Wells Fargo & Co. and Fidelity Investments, while smaller firms will gravitate toward providing one-on-one advice.

Randy Welch, director of Principal’s Investment Services Group, said Principal has been offering investment advice to 401(k) plans for the past three years through an agreement with Ibbotson Associates, now a subsidiary of Morningstar Inc. The Pension Protection Act provides a more liberal interpretation of a Labor Department ruling made about five years ago that determined that advice could be provided through an independent third-party provider, he said.

Under a managed account program Principal launched in 2004, retirement plan sponsors have the option to offer investment advice through Ibbotson as an option for their employees, but fewer than 5 percent of plan sponsors have done so, Welch said. Part of the reason for that has been the popularity of Principal’s Lifetime target retirement date funds, which automatically adjust asset allocations as a person’s retirement date draws closer. Also, employers increasingly choose these types of funds as a default option for employees who don’t specify their own fund allocations.

“About one in every four dollars coming into our new plans is going into Lifetime funds, which have total assets of just over $6 billion today,” he said.

In the future, Principal may consider providing advice directly through its own advisers, but for now it plans to continue using Ibbotson, Welch said.

“I think it’s something all of us in the industry will look at in the future,” he said. “It’s all competitively driven. But for now, it’s seamless for (plan sponsors) and it’s viewed as independent. We think that makes it attractive for a plan sponsor.”