YOUR INVESTMENT OPTIONS

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1 YOUR INVESTMENT OPTIONS Foster Wheeler Pension Plan (the Plan ) This booklet shows you the range of investment options available through the Foster Wheeler Pension Plan (the Plan ). This should be read in conjunction with the Defined Contribution (DC) section booklet. Introduction If you are a member of the Plan you and the Company pay contributions to your pension account. These contributions are invested and any investment returns generated are reinvested, so the money in your account should grow. The investment options you choose will have a direct impact on the value of your pension account when you retire. It is very important that you make the long-term investment choices that are right for you. This guide aims to help you choose how to invest the contributions to your pension account. You should read this guide together with the DC section booklet.

2 Investment basics All investment carries an element of risk. Successful investment involves balancing the different kinds of risk. There are three main kinds of investment risk: Account movement This is the risk that the value of your investments may go down in value. Investments which carry this risk such as equities (shares) have tended in the past to provide a good level of investment growth over the longer term. Because of this, you may be prepared to accept this risk over a large part of your working life in order to aim for higher investment returns. Pension adequacy This is the risk that your investments may not grow faster than inflation over the long term. Investments which carry this risk, such as cash, tend to be secure in the short term. However over the long term, inflation can eat away at their value and you risk not being able to secure an adequate benefit. Because of this, cash tends to be used as a short-term investment only. Pension movement This is the risk that a sudden increase in the cost of buying pensions just before you retire could take away some of the buying power of your account. Investments such as bonds (loans to a company or the Government) can help to safeguard your account against this risk as the value of bonds tends to move in line with the cost of buying pensions. Your investment approaches There are two approaches that you can take: ``Option 1: you can choose Lifestyle. This approach invests your contributions in a set mix of investment funds and automatically switches your account into progressively less risky investments as you approach retirement. Lifestyle is designed to manage risk from pension movement. ``Option 2: you can choose individual investment funds and the proportion of your account you would like to invest in each of these funds. Alternatively, you can allocate some of your investments to option 1 and the rest to option 2. We recommend that you take independent financial advice before selecting your investment approach. Option 1: Choosing Lifestyle With Lifestyle, the contributions to your account are automatically invested in a mixture of funds that vary according to the number of years to your normal retirement age. Lifestyle aims to take advantage of the way different investments behave, and to balance different types of investment risk. [2] I NVESTMENT OPTIONS FOSTER WHEELER PENSION PLAN

3 In the early to middle part of your career Lifestyle invests mainly in equities (shares). Equities are generally expected to give higher investment returns in the long term, helping to guard against pension adequacy risk, though they can lose value quickly in the short term (account movement risk). As you approach retirement, your account is gradually switched into bonds and cash, to take advantage of their greater expected stability and guard against pension movement risk. If you choose the Lifestyle option, your pension account will be invested initially in the Aquila (50:50) Global Equity Index Fund (85%) and the Aquila Over 15 year Corporate Bond Fund (15%). When you are six years away from your normal retirement age, your account will start to be gradually transferred from the BlackRock Global Equity Fund into the Aquila Over 15 year Gilt Index Fund. Approximately two years later, another part of your account in the BlackRock Global Equity Fund will also start to be transferred into the Cash Fund. When you are two years away from your normal retirement age, the part of your account held within the BlackRock Corporate Bond Fund will begin to be transferred into the BlackRock Gilt and Cash Funds. By the time you reach one year from your normal retirement age, approximately 75% of your account will be invested in the BlackRock DC Aquila Over 15 year Gilt Index Fund and 25% in the Cash Fund as illustrated in the chart. Ongoing contributions will be paid into the relevant Lifestyle funds, depending on your time horizon to your retirement age. DC LIFESTYLE INVESTMENT STRATEGY 100 % FUND ALLOCATION YEARS TO RETIREMENT 50/50 Global Equity Index Fund Over 15 year Corporate Bond Fund Over 15 year Gilt Index Fund Cash Fund INVESTMENT OPTIONS FOSTER WHEELER PENSION PLAN [ 3 ]

4 The Lifestyle option will not necessarily produce higher benefits than other approaches to investment. Future stock market conditions may mean that for some periods of time, equities do not give better returns than other types of investment. The Lifestyle option is designed to produce a sensible mix of investment returns and risks for the majority of members. It may not be appropriate for everyone. The Trustees may change the Lifestyle option and the funds in it in the future. Important changing your DC retirement age The normal retirement age for Foster Wheeler employees is 65. However, you may nominate a target DC retirement age between 55 75, as currently stipulated by the UK government. This does not necessarily have to be the same age as your retirement from employment. If you want to draw your DC pension at any age other than 65, you will need to tell the administrators as soon as you decide, as your account will need to be switched to match your target DC retirement age. Option 2: Choosing your own mix of funds A choice of 13 funds is available for you to invest your pension account. You can choose just one fund, or select any combination you wish in any proportion. Four of these funds are used in the Lifestyle option, but you can also use them as part of your own selection. It is up to you to decide which investment option you should choose. Your investment manager The Trustees originally selected Barclays Global Investor after carefully evaluating several different managers with the help of their pension advisers, Aon Hewitt. The investment manager for the DC section of the Foster Wheeler Pension Plan is currently BlackRock. BlackRock completed a merger with Barclays Global Investors on 1 December 2009 and the combined firm is known as BlackRock. Following the merger, the Trustees reviewed BlackRock and considered them to be appropriate. The Trustees will continue to monitor the performance of BlackRock on a regular basis and, if necessary, replace the manager or add other managers. At 30 June 2014, it was estimated that BlackRock managed over 3trn assets for a wide range of clients around the world. The Trustees have chosen a range of passively managed funds and actively managed funds from BlackRock, and will invest your pension account in the BlackRock funds you have chosen. [4] I NVESTMENT OPTIONS FOSTER WHEELER PENSION PLAN

5 Passively managed funds Passively managed means that the investment manager aims to follow or track the returns of a market index (which is why this approach is also known as index tracking ). This approach does not aim to achieve higher returns than the market index. It does aim to minimise the risk of achieving lower returns than the market index. You should remember that the market index can go down as well as up. Actively managed funds Actively managed means that the investment manager aims to achieve higher returns than the market index over the long term. Actively managed funds carry a slightly higher risk than passively managed funds as the returns could be lower than the market index. Funds available Thirteen investment funds are currently available. You can choose to invest in one or more of these funds. The capital risk indicates the degree of risk associated with each fund, with 7 representing the highest risk and 1 the lowest risk. Capital risk is the risk of your pension savings falling in value. What does this mean for you and your pension account? The range of investment options caters for different attitudes to risk and the requirement to balance risk with reward according to an individual s needs and goals. The funds invest in a wide range of asset classes (types of investment), which carry different levels of risk, including: cash, bonds and equities (company shares). Dealing with the main types of investment in order of risk: ``Cash is the safest but is likely to generate comparatively lower investment returns over the long term; historically cash savings have struggled to beat inflation. ``Fixed Income Funds invest in a spread of fixed income investments, including government bonds and perhaps corporate bonds, and are suitable for lower risk investors, particularly where individuals may be looking to buy an annuity. ``Multi-Asset Funds invest in a mix of UK and global equities, Fixed Income funds, cash and alternative investments such as commercial property and commodities. Given the diversity in assets, a Multi-Asset Fund offers more fund stability than a fund of pure equities but, as a result, may reduce the potential for higher rate returns. ``Property Funds invest in UK commercial property assets such as offices, shopping centres, retail warehouse parks and industrial estates, and are suitable for medium risk investors looking for long-term growth. ` ` Equity Funds are invested in shares of companies, which can be based in the UK or overseas. There is greater volatility than the other funds described above, but improved long-term growth prospects. INVESTMENT OPTIONS FOSTER WHEELER PENSION PLAN [ 5 ]

6 Risk rating: We have classified each fund option with a risk rating from 1 to 7 in the fund table. 1 (Very Low), 2 (Low), 3 (Low-Medium), 4 (Medium), 5 (Medium-High), 6 (High), 7 (Very High). Remember that the higher the risk score, the greater the potential for good long-term growth. However, the higher risk funds are also likely to display greater volatility over the shorter term. Keeping a check on your pension Whichever option you choose, Lifestyle or Self Select, it is important that you monitor your pension account from time to time. There s every chance that your circumstances and attitude to risk are likely to change as you progress through your working life, which means you might want to adjust your investment choices over time. How to find out more If you would like to find out more about your investment options, then please go to blackrock.co.uk/pensions/fosterwheeler You can also call the BlackRock helpline on The office is open Monday to Friday 9.00 a.m. to 5.00 p.m., except Bank Holidays. Alternatively you can send an to dchelpdesk.europe@blackrock.com Fund investment charges The annual management charges imposed by the investment manager depend on which funds you invest in. They are included in the table on the next page. The management charge for the Lifestyle option is calculated from the charges for the funds it uses. For example, if your pension account was valued at 10,000 and was invested in the Global Equity Fund, the annual management charge deducted from your pension account would be 15 ( 10,000 x 0.15%). If your account was invested in the Lifestyle option, your pension account was valued at 10,000 and was invested 85% in the Global Equity Fund and 15% in the Corporate Bond Fund, the annual management charge deducted from your pension account would be 15 ( 8,500 x 0.15% + 1,500 x 0.15%). [6] I NVESTMENT OPTIONS FOSTER WHEELER PENSION PLAN

7 Changing your choices From time to time, you should review your investment choices to ensure that they continue to meet your needs, and make changes if necessary. There are two changes you can make: ``You can re-direct future contributions to a different investment fund (or funds) And/or ``You can switch your accumulated pension account to a different investment fund (or funds). You may make two switches of funds per calendar year free of charge. Further switches may incur a charge of 25 each at the Trustees discretion. Both redirection of future contribution and switching existing funds can be done by completing the appropriate section(s) on the investment fund choice form available on the pension pages of the intranet. Alternatively, these changes may be made online via Towers Watson s epa facility. Future changes From time to time the Trustees may decide to change the investment manager, change the funds on offer, or change the Lifestyle option. You will be notified if this occurs, and you may have to make new investment choices. INVESTMENT OPTIONS FOSTER WHEELER PENSION PLAN [ 7 ]

8 Fund name Lifestyle Funds Aquila (50:50) Global Equity Index Fund (Global Equity) Aquila Over 15 yr Corporate Bond Index Fund (Corporate Bond) Aquila Over 15 yr Gilt Index Fund (Long Dated Bond) Cash Fund (Cash) Additional Funds Institutional Emerging Markets Fund (Emerging Markets) Aquila World (Ex-UK) Equity Index Fund (International Equity (Ex-UK)) LGIM Ethical Global Equity Index Fund (Ethical) Fund type Category Fund objectives and policies Equity Passive Invests primarily in UK and overseas equities and aims to produce a return in line with its benchmark. Approximately 50% of the Fund is invested in shares of UK companies and the remaining 50% is split equally between shares of companies in the US, Europe ex-uk and the Pacific Rim. Fixed Income Fixed Income Passive Passive This fund invests in investment grade corporate bonds denominated in sterling with a maturity period of 15 years or longer and aims to produce a return in line with its benchmark. Invests in UK government bonds with a maturity period of 15 years or longer and aims to produce a return in line with its benchmark. Cash Active Aims to produce a return in excess of its benchmark principally from a portfolio of sterling denominated cash, deposits and money-market instruments. Equity Active Invests mainly in equities in the world s emerging economies such as Latin America and Eastern Europe and aims to provide a return in excess of its benchmark. Given the volatile nature of these markets, investment in this Fund involves a higher than usual degree of risk. Equity Passive Invests in shares of overseas companies (Europe ex-uk, Japan, Pacific Rim, US and Canadian markets) according to market capitalisation weightings and aims to produce a return in line with its benchmark. Equity Passive Invests mainly in overseas equities within the FTSE4 Good Global Equity Index and aims to track the return of the benchmark. Investment charges* Risk rating [8] I NVESTMENT OPTIONS FOSTER WHEELER PENSION PLAN

9 Fund name Aquila UK Equity Index Fund (UK Equity) HSBC Amanah Pension Fund (Shariah) UK Growth Fund (UK Equity) Property Fund (Property) Diversified Growth Fund (Diversified Growth) Aquila Over 5 yr IL Gilt Index Fund (Index Linked Bond) Fund type Category Fund objectives and policies Equity Passive Invests in shares of UK companies and aims to produce a return in line with its benchmark. Equity Passive Invests in company shares from around the world and is compliant with Islamic Shariah principles. Equity Active Invests mainly in UK equities and aims to produce a return in excess of its benchmark. Property Passive The Fund has a diversified exposure to a range of commercial property assets such as offices, shopping centres, retail warehouse parks and industrial estates. The Fund gains its exposure to these assets by investing in a number of underlying pooled property funds. Multi- Asset Fixed Income Active Passive This Fund targets a consistent investment return of 3.5% above the Bank of England base rate measured over rolling three-year periods by utilising a multi-asset flexible investment approach. The focus on getting the asset mix right in order to achieve the target means this Fund will generally hold a variety of different types of assets at any one time. Invests in index-linked UK government bonds with a maturity period of five years or longer and aims to produce a return in line with its benchmark. Investment charges* Risk rating * The Investment Charges include the Total Expense Ratio ( TER ). The TER of a fund is the ratio of the fund s total operating costs to its average net assets and is an indication of the total cost to an investor of investing in a fund. The TER includes the annual management charge (AMC) and any other costs that might be borne by the fund. Examples might include dealing and audit costs. INVESTMENT OPTIONS FOSTER WHEELER PENSION PLAN [ 9 ]

10 For more information Please contact the administrators, Towers Watson: Call the Foster Wheeler helpline on or or Write to Foster Wheeler Pension Plan, Towers Watson, PO Box 545, Redhill, Surrey, RH1 1YX. The administrators will be able to deal with most enquiries. However, you can find out more information on BlackRock funds by looking at BlackRock s website: blackrock.co.uk/pensions/fosterwheeler Follow the menu to stay up to date with the latest pension news and to obtain the latest quarterly factsheets for the funds in which you are invested. If you cannot find the answer to your question on the website, you can call BlackRock s helpdesk on or them at dchelpdesk.europe@blackrock.com Taking advice Neither the Company, nor its pension advisers, nor the Trustees are authorised to give you specific advice about your investment choices. If you want specific advice, you should contact an Independent Financial Adviser. The Financial Conduct Authority (FCA) website has guidance on finding financial advice at moneyadviceservice.org.uk You can also ring their helpline on (calls will be charged at local rates). unbiased.co.uk can put you in touch with financial advisers in your area. [10] I NVESTMENT OPTIONS FOSTER WHEELER PENSION PLAN

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12 Want to know more? blackrock.co.uk/pensions/fosterwheeler Information regarding the Foster Wheeler Pension Plan (the Plan ) has been accepted in good faith from the Trustees of the Plan. No responsibility can be accepted by BlackRock for any errors, inaccuracies or omissions in the information provided or for any loss or damage that may result from reliance being placed upon it. Past performance is not a guide to future performance. The value of investments and the income from them can fluctuate and are not guaranteed. Investors may not get back the amount invested. Rates of exchange may cause the value of investments to go up or down. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Any objective or target will be treated as a target only and should not be considered as an assurance or guarantee of performance of a fund or any part of it. A fund s objectives and policies include a guide to the main investments to which a fund is likely to be exposed but a fund is not necessarily restricted to holding these investments only. Subject to a fund s objectives, a fund may hold any investments and utilise any investment techniques, including the use of derivatives, permitted under the FCA s Conduct of Business Sourcebook which contains the rules by which investment of the funds is governed. The BlackRock Life Limited notional fund units have a single unit price. The unit prices are normally calculated on each business day. For performance reporting, notional units are valued at special closing prices on the last working day of each month to enable comparison with the relevant benchmark index. This document relates to the products of, and is issued by, BlackRock Life Limited, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. BlackRock Life Limited, 12 Throgmorton Avenue, London EC2N 2DL. Phone: Fax: Registered in England number BlackRock is a trading name of BlackRock Life Limited. (Splash/262001/Apr15)