Health Care Policy 29 January 2013

Active Member Membership of a Medical Aid Scheme is a condition of employment for salaried employees. Have to choose within 60 days. Membership to: The Sappi Medical Aid Scheme/Bestmed The Ingwe Medical Aid Scheme (the union nominated medical aid scheme) The Sizwe Medical Aid Scheme Spouse’s medical Aid Scheme Change of status from wage earner to salary earner. (Even in instances where the employee had previously resigned from the medical aid scheme while a wage earner, as membership of a recognised Medical Aid Scheme becomes a condition of employment upon change of employment status.) Termination of the spouse’s medical aid membership due to divorce, death, retrenchment , dismissal or in cases where the benefit is no longer available.

Written application must be forwarded to the Fund Manager should a main member request to resign from the Sappi Medical Aid Scheme.

Post-Retirement Subsidy Qualify for company subsidy: The employee must have been employed before 1 October 1999 The employee must have been a member of a recognised medical scheme at time of retirement. No company subsidy will be paid: The pensioner resigns as a member of the Medical Aid Scheme and wishes to resume membership at a later stage for reasons other than divorce, death of spouse or retrenchment, the pensioner will not qualify for subsidy towards the Medical Aid Scheme Where a pensioner is on a spouse’s medical aid scheme. Subsidy will not be paid for membership of the spouse’s medical aid scheme.

Written application must be forwarded to the Fund Manager should a pensioner wish to resign from the Sappi Medical Aid Scheme.

In order to qualify for the company subsidy: Spouses/Partners In order to qualify for the company subsidy: The partner will only qualify for the company subsidisation as per definition. (Living together for 2 years) The spouse/partner’s termination of medical aid membership was due to retrenchment, dismissal or in the case where the benefit is no longer available. The spouse/partner was registered as a beneficiary at the time of retirement and the employee was employed before 1 October 1999. Widows/ers: Company subsidisation will continue as at the time of the employee’s death. The widow/er will become the main member on the scheme. Ex-spouses will not receive company subsidisation.

Children Children under the age of 21 years: Will receive the company subsidy Registration is after 60 days, the benefit will only apply from the date of registration. The company subsidy will only be paid from date of registration. Children of a common law partner will not receive company subsidy. Subsidy will only apply to the children who were registered as beneficiaries at the time of retirement and provided the employee was employed before 1 October 1999. Any children registered after retirement will not receive a subsidy. Mentally/physically disabled children over the age of 21, will receive the company subsidy and adult rates will apply.

Children over the age of 21: A female/male dependant (under the age of 21) of the main member who gives birth or fathers an off-spring: The daughter/son will remain a dependant on the Sappi Medical Aid Scheme as an child dependant with company subsidisation. The baby (grandchild) will be registered as a child dependant but will receive no company subsidisation. Children over the age of 21: Studying full time between the ages 21 to 26: Company subsidy Financially dependant on the main member: No company subsidy.

Grandchildren Where legal guardianship or adoption of the grandchild has been awarded to the main member. The grandchild will register as a child dependant with company subsidy.

Overseas secondment: Subsidisation will be paid should the spouse/partner and the children remain in South Africa. The spouse/partner will register as the main member. Subsidisation will be paid should the child dependants remain in South Africa: The eldest child dependant will be registered as the main member and the siblings will register as dependants of this main member on the Medical Aid Scheme for the duration of the secondment. Although the child will be registered as the main member the normal rules pertaining to a child will be in force i.e. can remain a member until 21 or 26 if the child is still studying. Once the oldest child is no longer the main member the next eldest sibling will become the main member, if applicable

Blood relatives of the main member: Brother and/or sister of the main member: Where the main member is legally liable for family care and support To the blood relatives They are under the age of 21year (brother and sister) Company subsidisation will not apply and child rates will apply. The same rules will be applicable as for child dependant. Aged dependants: Subsidisation will not be paid Blood parents, who are financially dependant on the main member, and adult rates will apply.

In the event that both spouses/partners are employed by Sappi, subsidisation: The spouses/partners choose to retain separate membership and both can register as main members of the Medical Aid Scheme.

Current Subsidy impact Sappi (subsidy) and Member contributions payable in 2013 – subsidy of 50% remains unchanged R0 - R1 750 R 738 R 1,476 R 1,081 R 2,162 R 343 R 686 R1 751 - R2 500 R 856 R 1,711 R 226 R 451 R2 501 - R5 000 R 1,026 R 2,051 R 56 R 111 R5 001 - R7 500 R 1,127 R 2,254 -R 46 -R 92 R7 501 - R10 000 R 1,230 R 2,460 -R 149 -R 298 R10 001 - R15 000 R 1,338 R 2,675 -R 257 -R 513 R15 001+ R 1,440 R 2,880 -R 359 -R 718 R 480 R 959 R 759 R 1,518 R 280 R 559 R 570 R 1,140 R 189 R 378 R 769 R 1,537 -R 10 -R 19 R 872 R 1,743 -R 113 -R 225 R 973 R 1,946 -R 214 -R 428 R 1,076 R 2,151 -R 317 -R 633 -R 368 -R 736 R 94 R 187 R 273 R 545 R 179 R 358 R 105 R 209 R 168 R 336 R 115 R 229 R 158 R 316 R 126 R 251 R 147 R 294 R 135 R 270 R 138 R 275 R 145 R 290 R 128 R 255 M A C Current 50% subsidy Sappi Medical Aid Scheme Bestmed - Pace1 Saving Income Band Subsidy Member portion Total contribution

Proposed Subsidy impact Sappi (subsidy) and Member contributions payable in 2013 – subsidy of 50% changes to a fixed subsidy on Bestmed R0 - R1 750 R 738 R 1,476 R 1,287 R 875 R 2,162 R 137 R 686 R1 751 - R2 500 R 856 R 1,711 R 20 R 451 R2 501 - R5 000 R 1,026 R 2,051 -R 151 R 111 R5 001 - R7 500 R 1,127 R 2,254 -R 252 -R 92 R7 501 - R10 000 R 1,230 R 2,460 -R 355 -R 298 R10 001 - R15 000 R 1,338 R 2,675 -R 463 -R 513 R15 001+ R 1,440 R 2,880 -R 565 -R 718 R 480 R 959 R 1,038 R 1,518 R 1 R 559 R 570 R 1,140 -R 90 R 378 R 769 R 1,537 -R 289 -R 19 R 872 R 1,743 -R 392 -R 225 R 973 R 1,946 -R 493 -R 428 R 1,076 R 2,151 -R 596 -R 633 -R 647 -R 736 R 94 R 187 R 142 R 403 R 545 R 310 R 358 R 105 R 209 R 299 R 336 R 115 R 229 R 289 R 316 R 126 R 251 R 278 R 294 R 135 R 270 R 268 R 275 R 145 R 290 R 258 R 255 M A C Saving Income Band Subsidy Member portion Total contribution Proposed fixed subsidy Sappi Medical Aid Scheme Bestmed - Pace1

Proposed Subsidy impact Subsidy calculation examples – based on fixed subsidy M A C Total Beat 2 1 R 1,026 R 0 Pace 1 R 2,162 R 1,287 R 875 Pace 4 R 3,978 R 2,691 R 798 R 1,824 R 1,518 R 3,680 R 1,038 R 2,325 R 480 R 1,355 R 7,956 R 2,940 R 5,631 2 R 866 R 2,690 R 284 R 2,108 R 582 R 1,090 R 4,770 R 2,609 R 806 R 2,161 R 1,864 R 9,820 R 1,580 R 7,211 Family composition Total contribution Sappi contribution Member contribution The abbreviations used in the table are as follows: M – Main member A – Adult dependant C – Two children

Bestmed Pace 1 (Default option) Total Contribution Subsidy Amount Subsidy % Member’s Contribution Member % M R2,162 R1,287 60% R875 40% A R1,518 R1,038 69% R480 31% C R545 R142 26% R403 74% Total (Monthly) R4,770 R2,609 54% R2,161 46% Total (Annual) R57,240 R31,308 R25,932

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