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George Chang
June 3, 2026
If you’re a Kaiser physician enrolled in Plan 2 or Plan 3, you likely received an email recently with this language:
“The Russell Real Asset Fund is being removed from the investment lineups... could have an impact on how your accounts are invested.”
And further down:
“Changes in any of these factors may result in changes to the dates and timing, including the dates on which, and thus the prices at which, assets in your account are sold and/or reinvested.”
That’s a lot of words that sound like something might go wrong. Should you be concerned? The second passage is typical legal boilerplate about trade execution mechanics that appears on fund transition notices. And the first, while technically accurate, buries the part that matters most.
So let me answer the question you’re actually asking: My TPMG 401(k) is switching from the Russell Real Asset Fund to a State Street fund in July: what does that mean, and do I need to do anything?
No action is needed if you want your real asset elections to stay the same. Effective July 1, 2026, your Russell Real Asset Fund balance transfers automatically to the State Street Real Asset Non-Lending Series Fund Class C. No action needed, and also no tax consequences because the transfer happens inside your tax-advantaged plan. What’s changing is which fund is used for it.
Both the outgoing and incoming funds do the same job in a retirement portfolio: they hold a mix of assets that tend to hold their value, or gain value, when inflation rises. That mix includes real estate investment trusts (REITs), infrastructure companies, commodity-linked investments, and Treasury Inflation-Protected Securities (TIPS). The new State Street fund tracks a blended benchmark built from those same categories.
The transition affects both Plan 2 (the Permanente Contribution Plan) and Plan 3 (the Salary Deferral Plan). If you have a real asset allocation in either plan, it transfers in full on July 1 at market close. You won’t see a gap in coverage, and you won’t need to rebuild anything.
One consideration: this change doesn’t tell you whether your current real asset allocation percentage is right for your situation. If you haven’t looked at your investments and asset allocation in a while, now is probably a good time to ensure they’re still aligned with your goals.
The fund change notice lists the Russell fund’s expense ratio as 0.00% and the State Street fund’s as 0.22%. If you noticed, that’s good, because you should be paying attention to fund expenses. However, the 0% figure needs some context.
The Russell Real Asset Fund listed an expense ratio of 0.00%, but that number doesn’t always capture all the costs a fund carries. Funds can recoup expenses through other means (securities lending revenue, for example) that don’t show up as a listed fee. We don’t have visibility into the Russell fund’s exact cost structure, but 0.00% listed and truly free aren’t always the same thing.
The State Street fund’s 0.22% is a gross expense ratio, stated transparently. For a fund covering real estate, infrastructure, commodities, and inflation-protected bonds, that’s a reasonable number. Worth noting: the “Non-Lending” in the fund name means State Street does not lend out the fund’s holdings to generate additional revenue. Some funds offset costs that way; this one doesn’t. The 0.22% is the clean, all-in number.
If the Russell fund was performing, why change it?
It was. The fund’s 10-year annualized return was +6.81%, with solid figures across shorter periods as well. This wasn’t a performance problem.
However, in plain terms: the Russell Real Asset Fund was moving almost identically to its benchmark most of the time. That’s not what you expect or are paying for with an actively managed fund.
If you like getting into the statistics (if you don’t, skip ahead), there are two that matter here:
R² measures how closely a fund’s returns track its benchmark (the index it’s supposed to relate to). A value of 1.00 would mean perfect tracking. The Russell fund’s R² was 0.98.
Beta measures how much a fund moves relative to its benchmark. A beta of 1.00 means it moves in lockstep. The Russell fund’s beta was 0.99.
The Retirement Program Committee of The Permanente Medical Group (TPMG) Board of Directors has an Employee Retirement Income Security Act (ERISA) fiduciary duty to act in participants’ best interests. When an actively managed fund is effectively replicating index behavior but potentially costing more in embedded fees, switching to a transparent, low-cost passive fund is exactly what that duty looks like in practice. This wasn’t a reaction to a problem; it was the committee doing its job.
No changes needed if you feel your current allocation is appropriate. July 1 comes and goes and your portfolio allocation looks the same, just with a different fund representing the real asset piece.
If this change prompts you to think about whether real assets belong in your plan at all, or how much you’re holding, that’s a worthwhile question, but it’s a separate one that depends on your overall situation. This fund change doesn’t force that review; it just makes it a natural moment for one if you’ve been meaning to do it.
If you have questions about how your TPMG plan fits into your broader financial picture, I’m happy to talk through it.
Pillar Point Wealth Management is not affiliated with TPMG, Kaiser Permanente, or Fidelity Investments. This article is for educational purposes only and does not constitute individualized investment or financial planning advice.
Advisory services offered through Pillar Point Wealth Management LLC, an investment adviser registered with the state of California. Advisory services are only offered to clients or prospective clients where Pillar Point Wealth Management LLC and its representatives are properly registered or exempt from registration.
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