Fidelity Computer Glitch Causes GM Benefit Chaos

March 31, 2005 ( - Some 22,000 General Motors Corp. employees, retirees and other dependents were left without health care and life insurance, pension coverage or other benefits earlier this year as a result of a Fidelity Investments computer glitch.

The Detroit News reported that the problems have forced some GM workers to pay for prescription drugs out of pocket until their record of health care coverage is reinstated while others have missed pension checks or seen their seniority records wiped out, affecting their benefits. The news report said payroll deductions for some benefits have changed without notice.

GM says it has restored benefits for some of the affected workers and retirees but many remain without coverage, according to the News.

The News report said that the problem developed in January when GM consolidated the administration of its benefit plans covering about 1.1 million employees, retirees and other dependents with Fidelity Investments as its HR outsourcer.


The automaker previously used three separate administrators for health care, retirement programs and other benefits, each with its own Web site and telephone access number. Fidelity created one Web site and telephone access number for GM employees and retirees. GM said at the time that the move would cut costs as well as improve quality, service and efficiency.

Data Transfer Glitch

The problem arose when personal information and other data for as many as 22,000 hourly and salaried workers, retirees, spouses and survivors of deceased GM employees were transferred incorrectly or failed to make it into Fidelity’s databases. The automaker discovered the problem and corrected many errors on its own. GM’s human resources personnel and benefit representatives with the United Auto Workers (UAW) have been deluged with complaints.

GM and Fidelity could not say Wednesday how soon the employee benefits would be fully restored. But the automaker is working with Fidelity and the UAW “to correct these issues as quickly as possible,” GM said in a prepared statement, according to the News.

“While the overall process of transitioning benefit administration to Fidelity Investments went well, we did experience some (information technology) problems,” GM said in the statement. “The majority of them are attributable to the complexity of multiple data systems in GM’s former legacy benefit systems. An action plan is in place, and we are confident that we will solve the outstanding issues soon.”

Employees and retirees eligible for GM benefit plans will not be abandoned, company spokeswoman Sharon Baldwin said. If emergencies arise and hospital care is needed, GM will do “whatever we need to” to protect plan members, Baldwin said. Employees and retirees who incur expenses that would otherwise have been covered “will be appropriately reimbursed,” she said.