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For employers: For investment documents relating to the SIP consultation visit our investment documents page.

Retirement Income Builder investment performance

A deep dive into how the Retirement Income Builder has performed against the investment balanced scorecard

Assessing the investment performance of the Retirement Income Builder

An investment balanced scorecard was introduced for the Retirement Income Builder, the defined benefit (DB) part of USS, in July 2022, and for the Investment Builder, the defined contribution (DC) part in January 2023.

A balanced scorecard tracks quantitative and qualitative performance. It provides a structured approach to bring together performance across different categories or strands.

Our scorecard allows our Investment Committee to independently and holistically assess the investment and advisory performance of our in-house investment manager, USSIM.

The scorecard covers six important categories:

  1. Investment return
  2. Investment risk
  3. Active management
  4. Portfolio resilience
  5. Responsible Investment
  6. Investment advice

The output from the scorecard is a rating on a sliding scale of Very Good, Good, Average, Poor and Very Poor.

The metrics within it are calculated or overseen by the independent performance and investment risk function. They’re also provided to the Investment Committee, who independently assess USSIM’s performance. The Investment Committee then assesses the performance of USSIM against the scorecard each year.

In 2022, it gave a score of Better than Good (between Good and Very Good) for the Retirement Income Builder. The committee called out USSIM’s positive handling of the turbulence seen in the gilt market, strong active management, the good performance of our private market assets, strong investment advice, the improved funding position, and the way risk was managed overall.

Below are the metrics used in the DB investment balanced scorecard:

Below you’ll find an analysis of some of the metrics within the scorecard that contributed to this score of Better than Good. Most of the data is to 31 December 2022. We’re not providing this for the Investment Builder yet, but we intend to include this next year.

    • Chart data as at 31 March 2023
    • The fund is the Retirement Income Builder fund
    • The Liability Proxy is an investible representation of the scheme’s liabilities, built from gilts. This allows us to track the performance of our liabilities alongside movements in interest rates.
    • The technical provisions funding ratio is 108%
      Technical provisions is a measure of the scheme’s DB liabilities. It’s the value of assets we seek to hold in order to fund our liabilities. It takes into account our investment strategy and the support provided by the covenant of the employers. The funding ratio compares the value of assets we currently hold with this technical provisions amount. The scheme ended the year in a much better funding position than it has been for some time.
    • Self-sufficiency funding ratio is 94%
      Self-sufficiency reflects the value of assets required to pay, with a high probability, all the benefits members have built up so far. This would be using a low-risk investment strategy without any further contributions, while retaining a high funding ratio. This funding ratio compares the value of assets we hold with this self-sufficiency amount. This funding ratio also improved significantly over the year.
The three scorecard categories below are more qualitative assessments. We have therefore provided some commentary on how USSIM has been measured.

When the above metrics are assessed, they’re also considered against several counterfactuals. These counterfactuals illustrate the impact of different investment decisions and were considered when assessing USSIM’s performance.

For more information on our investment performance, see our Report and Accounts.