There are two parts to USS. The Retirement Income Builder is the defined benefit (DB) part, which provides a guaranteed income in retirement. The Investment Builder is the defined contribution (DC) part, which allows you to save more towards your future in your own savings pot.
Both parts are invested in much the same way and aim to meet the objectives set under our investment balanced scorecards. One difference is that our Investment Builder funds are mostly managed by external investment managers, rather than internally. We also choose the assets, and monitor their return and risk levels in similar ways.
To help us measure how well we’re doing, we use what’s called an investment balanced scorecard. This takes a balanced view of investment performance against the backdrop of our investment objectives and the interests of our members and employers.
The scorecard covers six important categories that are assessed by our Investment Committee. This includes things like the return on our assets, the way investment risk is managed, the value our in-house investment team can add, and our Responsible Investment ambitions.
The output of the scorecard is a rating on a scale of Very Good, Good, Average, Poor and Very Poor. To see the full scorecard, visit how we manage the funds.
Balanced scorecards are consistent with systems thinking in moving towards a model of integrated thinking that is stronger than the classic management by objectives model and objectives and key results model, with more attention given to overall goals, context and behavioural alignment... USS practice is leading edge in developing the balanced scorecard.
Roger Urwin FIA FSIP, Global Head of Investment Content, Investment Consulting, Willis Towers Watson.
The value of the DB fund decreased by £1.8bn over the year to 31 March 2025. Equity markets across the globe performed strongly over the period despite ongoing inflation concerns. While credit markets displayed positive performance over the year, the rising interest rate environment proved to be a drag on government bonds. However, the estimated value of USS’s DB liabilities continued to fall materially, improving the funding position.
The defined benefit (DB) fund stood at £73.3bn against estimated liabilities of £62.9bn, based on monitoring of the 2023 valuation – giving an estimated Technical Provisions surplus, at 31 March 2025, of £10.1bn (116% funded). This means our funding position has ultimately improved.
You can find an analysis of some of the metrics within the DB scorecard that contributed to this score on our investment performance page for the Retirement Income Builder.
The scheme significantly outperformed the Liability Proxy (which keeps track with the estimated present day value of the scheme’s future pension liabilities) by 14.1% per annum over the five years to March 2025.
The Investment Committee gave a score of between Average and Good for USSIM’s investment performance across both the DB and DC investment balanced scorecards, which was slightly below target.
You can find an analysis of some of the metrics within the DC scorecard that contributed to this score on our investment performance page for the Investment Builder. In DC, due to the diversified nature of USSIM’s DC portfolios, USSIM’s performance was considered to be marginally below target based on overall investment returns versus long-term real return targets and public market comparators (which tended to be less diversified with higher equity allocations).
See the performance of each fund within the Investment Builder below over one year to 31 March 2025, against a long-term return target (LTRT) or benchmark.
| Investment Builder performance | 1 year | 5 year | ||
|---|---|---|---|---|
| Fund % | LTRT/Benchmark % | Fund % | LTRT/Benchmark % | |
| Growth Fund | 4.4 | 5.6 | 10.0 | 7.7 |
| Moderate Growth Fund | 4.7 | 4.6 | 7.8 | 6.7 |
| Cautious Growth Fund | 4.8 | 4.1 | 5.2 | 6.2 |
| UK Equity Fund | 8.3 | 9.1 | 11.1 | 11.8 |
| Global Equity Fund | 4.1 | 4.0 | 14.3 | 14.2 |
| Liquidity Fund | 5.2 | 5.1 | 2.6 | 2.5 |
| Emerging Markets Equity Fund | 7.0 | 5.8 | 8.6 | 7.5 |
| Bond Fund | 3.8 | 4.4 | 0.5 | 0.7 |
| Ethical Equity | -1.2 | 4.8 | 11.5 | 15.2 |
| Sharia Fund | 4.0 | 3.7 | 16.8 | 16.8 |
| Ethical Growth Fund | 0.1 | 5.6 | 8.1 | 7.7 |
| Ethical Moderate Growth Fund | 0.9 | 4.6 | 5.5 | 6.7 |
| Ethical Cautious Growth Fund | 1.9 | 4.1 | 3.5 | 6.2 |
| Ethical Liquidity | 5.2 | 5.1 | 2.6 | 2.5 |
You can find a more in-depth look at each fund and their performance in the Quarterly Investment Report for the Investment Builder.