The lawsuit was originally filed in December 2015 by Jerome Schlichter, the attorney representing plaintiffs who brought the original tranche of excessive-fee lawsuits against 401(k) plan sponsors more than a decade ago.
Anthem's $7 billion 401(k) plan had 11 Vanguard mutual funds and a suite of Vanguard target-date collective investment trust funds, in addition to an Anthem common stock fund and two non-Vanguard mutual funds.
In addition to paying too much for record-keeping services, plaintiffs alleged plan participants paid "far higher" investment fees than they should have since there were lower-cost share classes and investment vehicles available for the funds.
The lawsuit surprised advisers since Vanguard is widely seen as a low-cost fund provider.
Anthem, which denied the allegations, settled for $23.65 million, according to a court document filed Monday in the U.S. District Court for the Southern District of Indiana. The plan sponsor will also have to hire an investment consultant to review the plan's investment lineup, and conduct a record-keeper search to determine whether to keep Vanguard.
An Anthem spokeswoman declined comment on the settlement.
"We're pleased that Anthem employees and retirees will receive not only compensation for their past losses, but also will have an improved plan going forward to enable them to build their retirement assets," said Mr. Schlichter, a founder and managing partner of Schlichter Bogard & Denton.
Mr. Schlichter won a $55 million settlement, at the end of March of this year, in the lawsuit Tussey v. ABB, which dates to back 2006, . His largest settlement was in 2015, for $62 million, in a case against Lockheed Martin Corp.
401(k) fee cases have proliferated over the past decade, and expanded to cover financial services firms as well as nonprofit employers sponsoring 403(b) plans.
The case is titled Bell v. Pension Committee of ATH Holding Co.