Why investment performance matters to all members

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For many of us the financial markets are a bit of a mystery. Although we all have our own fictional picture of trading floors through blockbusters such as Wall Street and news stories reporting daily changes on the stock market, the majority of us don’t really give the financial markets much thought day-to-day.

According to Blackrock’s Global Investor Pulse survey, 60% of us have never considered moving our money from cash and savings accounts into investments, with 19% of us citing too little understanding of investing to make the move. So, if your money isn’t invested in the stock market, why should it matter to you how well the financial markets perform? Well, for any member of a pension scheme, the performance of the financial markets can be directly relevant.

For USS members, the performance of many different markets – including those for company stocks and shares – is important if you have any savings in the USS Investment Builder.

The benefits you accrue in the USS Retirement Income Builder are not dependent on how well the investments of the assets perform. To help ensure USS can fulfil the benefits promised, the USS Retirement Income Builder funds are invested by USS on behalf of the scheme’s beneficiaries. Our in-house team manages our investments, continually assessing a host of factors and monitoring the financial markets in the process.

Find out more about our mission to deliver the promised level of benefits in our blog, Protecting Pensions by our USS Chief Financial Risk Officer, Guy Coughlan.

Why investment performance matters

As a member of the USS investment Builder, you can choose how your pension contributions are invested. This is an importance choice, and one of the key ways to enhance your pension savings between now and your retirement is the return on your investments. The better your investments perform, the more money will be in your retirement fund to provide you with benefits when you retire. So, it is important you review any investment choices you have or plan to make (you can do this in My USS) in the USS Investment Builder to ensure they remain appropriate for your own retirement plans.

Read the guide to investing in the USS investment Builder for more information on the investment choices available to you. Individual fund factsheets can be found in My USS and contain information about the funds available and their performance.

Making your own investment choices

All active USS members have the option to make additional pension contributions into the USS Investment Builder. If you earn over £55,550*, are making additional contributions (including the match) or have recently transferred into USS you will already be contributing to the USS Investment Builder. You can opt-in to making additional pension contributions at any time regardless of your salary.

You can manage your additional pension contributions in the USS Investment Builder through My USS. From here, you’ll have two choices: the ‘Do It For Me’ option or the ‘Let Me Do It’ option. If you would like USS to manage any USS Investment Builder contributions for you throughout your journey to retirement, you have a choice of either the USS Default Lifestyle Option or the USS Ethical Lifestyle Option. If you don’t make a choice, your benefits will automatically be invested in the USS Default Lifestyle Option.

If you would prefer to make your investment choices yourself, then there are up to 10 investment options for you to choose from, or mix and match, each with differing levels of risk and potential return. Reviewing these investment choices is a good way to get to grips with investment risk and return, a comprehensive summary of which is included in our Guide to Investing in the USS Investment Builder.

You can also watch our animated guide explaining the investment choices you have with the USS Investment Builder.

Measuring investment performance

As investment performance is important for members with USS Investment Builder contributions, you may be interested in keeping up with the performance of your investments over the course of your journey to retirement. The good news is that all of the USS Investment Builder funds to 29 September have beaten their benchmark. Find out more about the first year of the USS investment Builder here.

If you’d like to find out more about our investment performance to date or the investment choices available, take a look at our further reading options below:

*The salary threshold is revalued each year to take account of inflation (the rising cost of goods and services). Automatic contributions to the USS Investment Builder are based on your salary in excess of the threshold.

Important note: This publication is for general guidance only. It is not a legal document and does not explain all situations or eventualities. USS is governed by a trust deed and rules and if there is any difference between this publication and the trust deed and rules the latter shall prevail. Members are advised to check with their employer contact for the latest information regarding the scheme, and any changes that may have occurred to its rules and benefits. Any references to the trustee or USSL in this document means Universities Superannuation Scheme Limited, the trustee company of Universities Superannuation Scheme and any references to the scheme or USS means Universities Superannuation Scheme. As you review this information, please keep in mind that past performance is not necessarily a guide to future performance. The value of investments may go down as well as up and the return on your investments is not guaranteed.

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