More and more companies are providing personal retirement accounts and health savings accounts with greater employee control and responsibility. At the same time, they are being allowed to provide additional education tools to help employees better manage these accounts.

Many of these tools are being provided by agents and consultants as "value-added" components of other offerings.

In coming years, experts believe that they will become more valuable to corporate benefits departments as companies continue to move away from traditional pension and health-care plans and towards defined contribution accounts.

With the Bush administration pushing for more control of social security accounts, these rules changes are seen as part of a larger effort to educate employees.

Many companies expressed misgivings about placing more personal responsibility in the hands of the employee. They fear lawsuits down the road if these accounts are squandered or otherwise lost.

Employers Acting To Educate

In the past, however, employers held back on educational programs because of concerns about fiduciary liability, which could arise if employees made poor decisions based on company-sponsored financial education or advice programs.

But rather than leave workers to fend for themselves, employers are taking a more active role in educating employees to make informed choices.

Surveys taken by Small Business Digest (www.2sbidgest.com) and others have shown a sharp rise in employers helping their workers to better manage their accounts.

This is in line with the Administration’s announced goal of putting more of the decision power in the hands of the individual.

He added that part of companies' motivation to educate is similar to the reasons for offering other benefits: increased job satisfaction, leading to higher productivity and greater retention of skilled employees.

An important side benefit to employers, said David P. Richardson, a professor of risk management at Georgia State University, is increasing contributions by rank-and-file employees, thereby allowing highly compensated employees to contribute more to their own retirement accounts in compliance with nondiscrimination rules. These concerns would apply to small and mid-sized businesses, he said.

"The transition to defined contribution accounts has increased the need for employee financial education programs."

Government rule changes during the past few years have cleared the concerns away. And employers are beginning to take advantage of the new developments.

For example, the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) clarified that employee financial education programs do not have to be counted as part of employee compensation. In addition, Department of Labor regulations have established safe harbors for employee financial education programs and clarified the distinction between financial education and financial advice.

"With the clarification of these safe harbors, the bar has been lowered," Richardson said.

With the advent of HSAs, many agents and brokers have found that they must devote considerable effort to educating client company managers and employees. At the same time, many agents see this as an opportunity to become more valuable to their clients.

Agents Providing Value-Added Education

In a recent survey by HSA Sales Digest (www.hsasalesdigest.com), 14% of agents surveyed said they were educating about, as well as selling, HSAs.

Employees of United Parcel Service Inc. (NYSE: UPS) have access to company-provided websites that let workers build model retirement scenarios. UPS also engages consultants from PriceWaterhouseCoopers LLP to conduct ongoing employee seminars on financial planning and understanding company benefits.

"It is a UPS-specific program, which is of great value," said Steve Nord, the company's compensation and benefits manager. "We don't talk to them about what they might find; it's what they do find at their company. We have really tried to make it as easy as possible for people to get information and some guidance about what to do."

An Internet portal offered by Solvay Pharmaceuticals Inc., the Atlanta-based subsidiary of Belgian chemical company Solvay SA, allows employees to check balances on their accounts, change investment choices and learn about diversification and the benefits of dollar-cost averaging.