Statement to members of the National Grid UK Pension Scheme

8 December 2016

This communication is directly relevant to the members of ‘Section C’ of the National Grid UK Pension Scheme (the “Scheme”).

Nigel Stapleton, Chairman of the Board of Trustees of the National Grid UK Pension Scheme said:

“It was announced today* that National Grid has entered into an agreement to sell a 61% interest in National Grid Gas Distribution Ltd (“NGGD”) to a consortium of long-term infrastructure investors. This follows the agreement reached between National Grid and your Board of Trustees to create three separate and independent sections within the National Grid UK Pension Scheme (Sections A, B & C).

“As you know, ever since the Company first announced plans to sell over a year ago, your Trustee Board has been working to ensure that the Scheme remains just as safe, secure and well supported. This includes having strong safeguards in place in relation to Section C, which will be sponsored by NGGD.

“Your Trustee Board will remain responsible for the Scheme as a whole and members’ pensions will continue to be administered by the same team, UK Pensions Operations. There will be no change to the pension you have built up, this includes no change to spouse benefits, death benefits or the way your pension increases.

“We wrote to you in November 2016 to confirm into which section (A, B or C) each member has been allocated, and that funding and security packages have been negotiated. The creation of these sections will take effect from 1 January 2017.

“Please be assured that your Trustee Board will continue to communicate fully with you as these changes progress. We will be writing to all members of Section C with further details about the announcement over the coming days.”

Any members of the National Grid UK Pension Scheme who have questions can call the UK Pensions Operation team on 08457 585 247 or email GDpensions@nationalgrid.com.

Notes:

* National Grid has entered into an agreement to sell a 61% (with an option to acquire a further 14%) interest in National Grid Gas Distribution Ltd (“NGGD”) to a consortium of long-term infrastructure investors including Macquarie Infrastructure and Real Asset, Allianz Capital Partners GmbH, Hermes Investment Management, CIC Capital Corporation, Qatar Investment Authority, Dalmore Capital and Amber Infrastructure Limited/International Public Partnership. The consortium’s members invest in a number of the UK's largest critical infrastructure projects, including Wales and West Utilities, Tideway Tunnel, Heathrow, Thames Water and Porterbrook.

You can read the full statement announcing the purchaser on the National Grid website.

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