TERMS OF REFERENCE – SEPTEMBER 2017

INDEPENDENT GOVERNANCE COMMITTEE

1. ESTABLISHMENT AND PURPOSE OF THE BLACKROCK LIFE LIMITED INDEPENDENT

GOVERNANCE COMMITTEE

1.1. The BlackRock Life Limited (‘BlackRock’) Independent Governance Committee (the ‘Committee’) is established with effect from 6 April 2015. The purpose of the Committee is to represent the interests of relevant policyholders1 in BlackRock’s relevant schemes2. These Terms of Reference set out the basis upon which the Committee will operate. The Terms of Reference are, as a minimum, intended to satisfy the requirements set out in the Financial Conduct Authority’s Conduct of Business sourcebook (‘COBS’) 19.5.5R.

1.2. Words used in these Terms of Reference but not defi ned have the meaning given to them in COBS 19.5.

2. MEMBERSHIP AND ATTENDANCE

2.1. Members of the Committee shall be appointed by BlackRock using an open and transparent appointment process. The independent Chair is involved in the process of appointing the other independent and employee members. Members are appointed for terms of no more than fi ve years and are eligible for re-appointment. Appointments will be for a maximum of ten years.

2.2. Only members of the Committee have the right to attend Committee meetings. At the discretion of the Chairman, other individuals shall be invited to attend for all or part of any meeting as and when appropriate to assist in the effective discharge of the Committee’s duties.

2.3. The members of the Committee shall be:

(a) Mr Allan Whalley

(b) Ms Claire Altman

(c) Mr Colin Richardson

(d) Mr Paul Bucksey*

(e) Mr Adrian Lawrence**

2.4. The composition of the Committee refl ects the requirements for an Independent Governance Committee to have:

(a) a majority of members that are independent of BlackRock; and

(b) suffi cient collective expertise and experience.

1. Relevant policyholder – a member of a relevant scheme who is or has been a worker entitled to have contributions paid by or on behalf of his employer in respect of that relevant scheme (COBS 19.5) (to include deferred members, individual personal pensions in the workplace pension scheme context and Additional Voluntary Contributions (‘AVC’s’).

2. Relevant scheme – a personal pension scheme or stakeholder pension scheme for which direct payment arrangements are, or have been, in place, and under which contributions have been paid for two or more employees of the same employer (COBS 19.5).

* Aegon employed member.**BlackRock employed member.

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3. CHAIRMAN

3.1. Mr Allan Whalley shall act as Chairman of the Committee. In the absence of the Committee Chairman and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting.

4. SECRETARY

4.1. BlackRock Fund Board Governance shall provide a member who shall act as Committee Secretary to the Committee. The Committee Secretary shall be responsible for taking and circulating minutes promptly and for other administrative functions pursuant to the functioning of the Committee.

5. QUORUM

5.1. The quorum necessary for the transaction of business shall be any three members, a majority of which shall be independent. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities and powers vested in or exercisable by the Committee.

5.2. Any member of the Committee who has a personal interest in the matters to be considered by the Committee shall declare that interest in advance of such discussions.

5.3. Members in communication with the meeting by conference call or video conference shall be counted in the quorum and entitled to vote.

6. SCHEDULE OF MEETINGS

6.1. Frequency of Meetings

The Committee shall meet formally at least four times a year.

6.2. Notice of Meetings

Meetings of the Committee, other than those regularly scheduled as above, shall be summoned by the Secretary at the request of the Chairman or by any member, as they consider necessary.

Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Committee and any other person required to attend no later than five working days before the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees, as appropriate, at the same time.

6.3. Documentation and Minutes of Meetings

The Committee shall receive an agenda and any other appropriate information in advance of each meeting and shall keep minutes of its proceedings, circulate those minutes as appropriate, record any changes in the membership of Committee and maintain appropriate records within the Fund Board Governance office. Minutes shall be submitted for formal approval at the succeeding meeting.

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7. COMMITTEE DUTIES

The principal duties of the Committee are:

7.1. The Committee has an overriding duty to act in the interests of relevant policyholders, both individually and collectively.

7.2. The Committee is under a duty to assess the ongoing value for money for relevant policyholders delivered by BlackRock’s relevant schemes, though not exclusively, through assessing:

(a) whether default investment strategies within those schemes:

(i) are designed and executed in the interests of relevant policyholders;

(ii) have clear statements of aims and objectives;

(b) whether the characteristics and net performance of investment strategies are regularly reviewed by BlackRock to ensure alignment with the interests of relevant policyholders and that BlackRock takes action to make any necessary changes;

(c) whether core scheme financial transactions are processed promptly and accurately;

(d) the levels of charges borne by relevant policyholders; and

(e) the direct and indirect costs incurred as a result of managing and investing, and activities in connection with the managing and investing of, the pension savings of relevant policyholders, including transaction costs.

7.3. The Committee should assess whether all the investment choices available to relevant policyholders, including default options, are regularly reviewed to ensure alignment with the interests of relevant policyholders.

7.4. The Committee may take into account any other factors it considers relevant or necessary in order to comply with its duties to act in members’ best interests and to assess value for money and will agree revisions to the Terms of Reference with BlackRock from time to time to ensure that the Terms of Reference reflect these other factors.

7.5. The Committee will take into account legislative or regulatory guidance (if any) on the assessment of value for money in relation to relevant schemes.

7.6. The Committee is under a duty to ensure that BlackRock complies with:

(a) the default fund charges cap;

(b) the ban on

(i) adviser commissions;

(ii) consultancy charging; and

(iii) active member discounts; and

(c) any other legislative and regulatory requirements that apply.

7.7. Legacy Schemes 3

(a) The Committee will review the audit of legacy schemes by the Independent Project Board (‘IPB’s’) and consider whether actions taken by BlackRock to address the IPB’s recommendations are sufficient.

3. Schemes sold before 2001

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8. COMPLIANCE

8.1. Where the Committee has concerns about:

(a) the value for money offered to all relevant policyholders in Blackrock’s relevant schemes;

(b) the quality of the information provided by BlackRock in order to enable it to assess the value for money offered to relevant policyholders or a failure by BlackRock to provide requested information;

(c) the resources BlackRock has made available to the Committee; or

(d) the arrangements made by BlackRock to ensure that the views of relevant policyholders are directly represented to the Committee.

It will raise those concerns with the board of directors of BlackRock Life Limited.

8.2. Where the board of directors of BlackRock Life Limited does not address the Committee’s concerns to its satisfaction and after making it clear in writing that this is the case, the Committee may decide to:

(a) escalate its concerns to the FCA;

(b) notify relevant policyholders;

(c) notify employers;

(d) publish its concerns.

9. ANNUAL REPORT

9.1. The Chair of the Committee will produce an annual report setting out:

(a) the Committee’s opinion on the value for money delivered by the relevant schemes, particularly against the matters listed under paragraph 7.2 (a) to (e);

(b) how the Committee has considered relevant and other policyholders’ interests;

(c) any concerns raised by the Committee with the board of directors of BlackRock and the response received to those concerns;

(d) how the membership of the Committee has sufficient expertise, experience and independence to act in relevant policyholders’ interests;

(e) details of each independent member of the Committee together with confirmation that the Committee considers these members to be independent;

(f) how each independent member of the Committee has taken into account4 whether:

(i) the individual is an employee of BlackRock or of another company within the BlackRock group or paid by them for any other role other than as a member of the Committee, including participating in BlackRock’s share option or performance related pay scheme;

(ii) the individual has been an employee of BlackRock or of another company within the BlackRock group within the five years preceding his appointment to the Committee;

(iii) the individual has, or has had within the three years preceding his appointment, a material business relationship of any description with BlackRock or with another company within the BlackRock group, either directly or indirectly; and

4. COBS 19.5.12G

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(g) the arrangements put in place by BlackRock to ensure that the views of relevant policyholders are directly represented to the Committee.

9.2. Where the Committee is unable to obtain from BlackRock the information it requires to assess the matters in COBS 19.5.5R(2), the Committee should explain in the annual report why it has been unable to obtain the information and how it will take steps to be granted access to that information in the future.

9.3. The annual report will be made publicly available by BlackRock together with these Terms of Reference (as amended from time to time) in a form and using a method agreed with the Committee.

10. POLICYHOLDER ENGAGEMENT

10.1. BlackRock will agree arrangements with the Committee which will ensure that relevant policyholders’ views can be directly represented to the Committee.

10.2. An explanation of the arrangements will be provided to all relevant policyholders.

11. CONFLICTS OF INTEREST

11.1. The Committee will publish a conflicts of interest policy to deal with conflicts that may arise between:

(a) The interests of relevant policyholders with other policyholders;

(b) The interests of individual policyholders with policyholders collectively; and

(c) The interests of different groups of scheme members or members of different schemes.

11.2. The policy must provide that where there is a conflict of interest between relevant policyholders and other collective interests, interests of relevant policyholders both individually and collectively, will take priority.

11.3. The conflicts of interest policy will be reviewed annually.

12. MANAGING CONFLICTS OF INTEREST

12.1. IGC members will declare any conflict of interest which may adversely affect the independence of the decision-making process conducted by the IGC.

12.2. Where in the Chair’s opinion such a conflict is acute or pervasive, the Chair may, in his discretion, require the conflicted IGC member to leave the room while a matter is discussed and/or require that they recuse themselves from the decision-making process.

12.3. The IGC will report any instances where members have recused themselves to Compliance.

12.4. It is acknowledged that IGC members may be under legal duties to share information learned as a result of acting on the IGC but that the terms of appointment of each IGC member restricts performance of those duties.

12.5. The Committee is to submit quarterly returns identifying conflicts disclosed at IGC meetings, to the BlackRock Executive Conflicts Management Committee on a quarterly basis.

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13. INFORMATION AND RESOURCES

13.1. BlackRock will provide the Committee with suffi cient resources as are reasonably necessary to enable it to carry out its duties effectively.

13.2. The Committee may request information from BlackRock relating to its relevant schemes including but not limited to:

(a) their features and the services they provide;

(b) investment administration;

(c) costs and charges borne by relevant policyholders; and

(d) the management and investment of pension assets.

13.3. BlackRock will comply with all reasonable information requests from the Committee.

14. SUPPORT OR EXTERNAL ADVICE

14.1. The Committee may (with the prior agreement of the Committee’s Chairman and BlackRock) obtain at BlackRock’s expense, any outside legal or professional advice to assist it to the extent necessary and proportionate to carry out its duties.

15. OTHER

15.1. The Committee shall, at least once a year, review its own performance, constitution and Terms of Reference, membership and appropriateness of information received to ensure it is operating at maximum effectiveness.

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Issued by BlackRock Life Limited (‘BLL’), which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. The Funds described in this document are available only to trustees and members of pension schemes registered under Part IV of the Finance Act 2004 via an insurance policy which would be issued either by BLL, or by another insurer of such business. BLL’s registered office is 12 Throgmorton Avenue, London EC2N 2DL, England, Tel +44 (0)20 7743 3000. Registered in England and Wales number 02223202. BlackRock is a trading name of BLL.

© 2017 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, iSHARES, SO WHAT DO I DO WITH MY MONEY, INVESTING FOR A NEW WORLD, and BUILT FOR THESE TIMES are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners. 006069a-DC JAN17-ENG (Splash/349458/Oct17)