Pension Plans

14

Average number of years with the company (North American employees as of Dec. 31, 2008)

3%

North American employees younger than 30 years (as of Dec. 31, 2008)

46

Average age of North American employees (as of Dec. 31, 2008)

Weyerhaeuser continues to sponsor defined pension plans covering most of our employees. These plans provide employees with ongoing income after retirement. Both the U.S. (qualified and non-qualified) and Canadian (registered and non-registered) plans covering salaried employees provide pension benefits based on each employee's highest monthly earnings for five consecutive years during the final 10 years before retirement. Plans covering hourly employees generally provide benefits of stated amounts for each year of service. The benefit levels for these plans are typically set through collective bargaining agreements with the unions representing the employees participating in the plans. Retiree medical and life plans are also offered in both countries for certain employees. For some employees Weyerhaeuser also pays a portion of the cost of the plan. These plans are typically not prefunded.

Financial Security

Weyerhaeuser employees are generally eligible to receive benefits from the pension plans at termination or retirement provided they meet certain eligibility requirements, adding to their own financial security in retirement. When considering the net returns of Weyerhaeuser's pension plan assets over the prior three-, five- and ten-year periods, Weyerhaeuser’s pension plan assets have performed in the top quartile when compared with other companies with pension plans greater than $1 billion. (Based on fourth quarter 2008 data from Bank of New York Mellon Corporation. All rights reserved.) The 2008 year-end estimated fair value of our combined (US and Canada) pension plans' assets was $4.1 billion compared with a $4.4 billion combined benefit obligation (all qualified, registered, non-qualified and non-registered plans), as of the end of 2008, measured on the basis of the Financial Accounting Standards Board Statement No. 158.

Over the 24-year period during which we've pursued our current investment strategy, the U.S. fund has achieved a net compound annual return of 15.3 percent. We've achieved first-quartile performance in the U.S. pension trust by investing in a diversified mix of nontraditional strategies, including hedge funds, private equity, opportunistic real estate and other externally managed alternative investment funds. The Canadian pension trust has a similar investment strategy.

Company Contributions

Company contributions to U.S. pension plans are based on funding standards established by the Employee Retirement Income Security Act of 1974. Contributions to Canadian pension plans are based on funding standards established by the applicable Provincial Pension Benefits Act and by the Income Tax Act.

We fund our qualified and registered pension plans and a portion of our non-registered plans. The company accrues for non-qualified pension benefits and health and life postretirement benefits. We may have a funding obligation for at least one of our U.S. qualified pension plans in 2009. The actual contribution is due by September 2010. We also expect to contribute approximately $7 million to our Canadian pension plans (registered and non-registered) in 2009.

Weyerhaeuser has adopted the provisions of Financial Accounting Standards Board Statement No. 158, which requires that the funded status of pension and other postretirement benefit plans be presented on the balance sheet. For more information, see the pension note in our most recent Annual Report and Form 10-K at investor.weyerhaeuser.com.