The Permanente Medical Group (TPMG) is redeeming all outstanding Subordinated Promissory Notes (subnotes) on December 10, 2025, and returning physician capital early. No action required from noteholders. This redemption applies only to physicians who were previously issued subnotes as  part of the program, which stopped issuing new notes after the 2015 series and was terminated in 2016.

Key points

• Who is affected? Only physicians who hold subnotes are affected (employed prior to 2016)
• Redemption Date:  All remaining TPMG Subordinated Promissory Notes will be redeemed on December 10, 2025, ahead of their original 30‑year maturities.
• Action Required:  No action is required to receive your principal and final interest payment.
• Tax Impact:  Principal is a return of capital (not taxable income), but 2025 interest remains taxable and will appear on a 1099‑INT issued in January 2026.
• Financial Planning:  The redemption creates a one‑time cash inflow, and you should consider how to employ this in the context of your overall financial goals and plan.
• For More Information: Active physicians can go to your HR portal, MD People, where you can view holdings and the Subordinated Promissory Note Fact Sheet 

What the letter means for you

The letter from Dr. Maria Ansari, CEO and Executive Director of TPMG, notifies noteholders that the TPMG Board has approved an early “call” of all subordinated promissory notes issued under the February 24, 2000 Certificate of Indebtedness. TPMG explains that it has built and maintained sufficient cash reserves, allowing it to return physician capital early while preserving the group’s financial stability.

For affected physicians, the practical impact is straightforward (no action needed):

• Your subnotes will be redeemed at face value, plus accrued interest through December 10, 2025.  Active physicians will see this in their paycheck, while for separated or retired physicians a check will be mailed.
• After that date, the notes will be canceled and will no longer earn interest.
• A statement included with the letter lists your personal holdings and dollar amounts.

If you did not receive this letter and do not see “Subordinated Promissory Note” holdings in MDPeople or prior 1099‑INTs, you likely do not hold subnotes and will not receive a redemption payment.

Smart next steps

• Confirm Information: Ensure your mailing and contact information are current, especially if you are retired or separated.
• Plan Your Cash:  Decide in advance how you want to use this cash:
  
  • Build or replenish your emergency fund.
  • Pay down higher‑interest debt.
  • Increase contributions to Plan 3/401(k), Roth strategies, or invest in a diversified taxable account.

For many TPMG physicians,this event is a good opportunity to revisit long‑term retirement projections and your overall balance sheet, as an illiquid, employer‑linked asset is converting into liquid cash that can be fully aligned with personal goals.

Brief history of the subnote program

The subnote program allowed physicians to lend directly to TPMG through unsecured subordinated notes, bolstering the medical group’s financial security while paying an annual interest rate based on the 1‑Year Treasury Constant Maturities yield plus 1%. Each series carried a 30‑year maturity, paid interest each December, and could be redeemed by physicians at separation or called early by TPMG for an entire series.

With this system‑wide call on December 10, 2025, that chapter ends: physician loans to TPMG are being repaid in full, and those dollars are becoming liquid capital that can be intentionally redeployed in your personal financial plan.

If you have questions about the subnotes redemption, or how to best plan for this infusion of cash, we’re here to help.  Schedule some time to chat today.

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