Headlines are great, but you need to read the entire article to get the full picture.

There is a new class-action lawsuit that is pitting participants in the Anthem Inc. 401(k) plan, with more than $5 billion in assets, against plan fiduciaries for an alleged fiduciary breach due to excessive investment management and administrative fees for a plan that has many Vanguard index funds in the lineup.

I’m sure people are scratching their heads on this one because Vanguard index funds charge some of the lowest management fees in the 401(k) plan business. The problem is the headlines don’t tell the whole story.

First off, this $5.1 billion 401(k) plan offered more expensive share classes of Vanguard funds when less expensive share classes of the very same fund were available to this Plan. For example, as noted in the complaint the Vanguard Total Bond Market Index charged 20 basis points when another share class of the very same fund (with the symbol VBMPX) only charges 5 basis points. The same can be said for the Institutional Index Fund, the Extended Market fund, and many of the other Vanguard funds in the investment lineup.

Secondly, Vanguard was also the recordkeeper of the Plan and it was alleged that the Plan was charged excess fees. For example, from 2010 to 2013, the plan paid approximately $80-$94 per participant for record keeping, both through hard-dollar and revenue-sharing fees. In September 2013, the expense was lowered to a flat annual $42 fee per participant. According to the complaint, the limit of a reasonable fee for the plan would have been $30 per head.

What does this all mean? It means that a plan sponsor must be vigilant and prudent in the selection of plan investments and providers. A plan sponsors needs to be aware of the cost of investment options and must always ask their financial advisor whether there are less expensive share classes available based on the size of their plan.