USS is a hybrid pension scheme, so it has both a defined benefit (DB) section and defined contribution (DC) part. You can read about both parts below or watch the video that explains how they work.
Retirement Income Builder
A DB pension, like the Retirement Income Builder, builds benefits based on your salary up to the salary threshold – it’s funded by contributions from you and your employer. This gives you a regular income every year for the rest of your life and a one-off, cash lump sum (tax-free up to a certain limit) of three times your pension at retirement. All members automatically join the Retirement Income Builder.
The Investment Builder is a DC arrangement – this means we invest contributions from you and your employer based on the investment choices you make. The returns on those investments then build up in your Investment Builder pot. Some members automatically join the Investment Builder, if they earn above the salary threshold. If you are making additional contributions or have transferred in from another scheme in the last few years (or switched funds from Prudential), you’ll have savings in the Investment Builder. All members can choose to make additional contributions to the Investment Builder.
Visit our how your pension works page, to find out more about the Retirement Income Builder and Investment Builder.