The tax effects of differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2002 and 2001 are presented in the following table: A valuation allowance was not required at December 31, 2002 and 2001. Based on historical taxable income and future taxable income projections over the period in which the deferred assets are deductible, manage- ment believes it is more likely than not that the Company will realize the benefits of the deductible differences. Pension Plan The Company provides a qualified defined benefit, non-contributory pension plan for substantially all employees.The cost of the plan was charged to expense and utility plant.The Company makes annual contributions to fund the amounts accrued for pension cost. Plan assets are invested  in mutual funds, pooled equity, bonds and short-term investment accounts.The data in the tables below includes the unfunded, non-qualified, supplemental executive retirement plan. In addition, the tables reflect  a plan amendment effective January 1, 2003, that increased the annual minimum benefit, which is recognized over the working life of the employees. Benefits earned by Dominguez employees under the Dominguez pension plan were frozen as of the merger date and future pension benefits to those employees will be provided under the Company pension plan.The Dominguez plan was curtailed.The Dominguez plan was fully funded and additional contributions to the plan could not be funded, although plan annual expense was recorded. As a result of the curtailment, accrued pension liability of $1,218,000 that had been expensed by Dominguez in prior years was reversed by the Company in 2000.The amount was offset against other operations expense. Savings Plan The Company sponsors a 401(k) qualified, defined contribution savings plan that allowed participants to contribute up to 18% of pre-tax compensation.The Company matches fifty cents for each dollar contributed by the employee up to a maximum Company match of 4.0%. Company contributions were $1,422,000, $1,425,000, and $1,298,000, for the years 2002, 2001 and 2000, respectively. Other Postretirement Plans The Company provides substantially all active, permanent employees with medical, dental and vision benefits through a self-insured plan. Employees retiring at or after age 58 with 10 or more years of service are offered, along with their spouses and dependents, continued participation in the plan by payment of a premium. Plan assets are invested in mutual funds, short-term money market instruments and commercial paper. Retired employees are also provided with a $5,000 life insurance benefit. 49 CALIFORNIA WATER SERVICE GROUP In thousands 2002 2001 Deferred tax assets: Developer deposits for extension agreements and contributions  in aid of construction $37,923 $41,531 Federal benefit of state tax deductions 6,325 5,744 Book plant cost reduction for future deferred ITC amortization 1,639 1,703 Insurance loss provisions 876 537 Pension plan 1,136 938 Other 4,703 868 Total deferred tax assets 52,602 51,321 Deferred tax liabilities: Utility plant, principally due to depreciation differences 82,130 79,348 Premium on early retirement of bonds 1,843 789 Total deferred tax liabilities 83,973 80,137 Net deferred tax liabilities $31,371 $28,816 12 EMPLOYEE BENEFIT PLANS