>> S&P 500 is not the most popular US equities benchmark for pension funds. Russell is the preferred provider

> Where are you getting this from?

At least it seems correct for a subset that may or may not be representative: “This report intends to provide insights into the overall and asset class benchmarks selected by the 50 largest U.S. public defined benefit plans. [.. ] the Russell 3000 index was most frequently cited to measure U.S. equity performance.”

https://www.nasra.org/Files/Topical%20Reports/Investment/P&I...

You’re right but this chain of reasoning is irrelevant/missing the important point.

You don’t need to track index X to be affected by changes in X. You only need to hold something related to X. Almost all pension funds, heck almost every investment account in the world holds something affected by some index.