The tax effects of differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2001 and 2000 are presented in the following table: A valuation allowance was not required during 2001 and 2000. Based on historic taxable income and future taxable income projections over the period in which the deferred assets are deductible, management 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 substan- tially 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, bonds and short-term investment accounts. The data below includes the unfunded, non-qualified, supplemental executive retirement plan. 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 fully funded and additional contributions to the plan could not be funded, although plan annual expense was recorded. At the merger date, the Dominguez plan was curtailed. 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 partici- pants to contribute up to 18% of pre-tax compensation in 2001 and 2000, and 15% in 1999. The Company matches fifty cents for each dollar contributed by the employee up to a maximum Company match of 4%. Company contributions were $1,425,000, $1,298,000, and $1,126,000, for the years 2001, 2000 and 1999. Other Postretirement Plans The Company provides substantially all active 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. Retired employees are also provided with a $5,000 life insurance benefit. Plan assets are invested in mutual funds, short-term money market instruments and commercial paper. The Company records the costs of postretirement benefits during the employees’ years of active ser- vice. The Commissions have issued decisions that authorize rate recovery of tax deductible funding of postre- tirement benefits and permit recording of a regulatory asset for the portion of costs that will be recoverable in future rates. The following table reconciles the funded status of the plans with the accrued pension liability and the net postretirement benefit liability as of December 31, 2001 and 2000: Amounts recognized on the balance sheet consist of: 39 CALIFORNIA WATER SERVICE GROUP Notes (continued) NOTE 10. EMPLOYEE BENEFIT PLANS In thousands 2001 2000 Deferred tax assets: Developer deposits for extension agreements and contributions  in aid of construction $41,531 $40,458 Federal benefit of state tax deductions 5,744 5,648 Book plant cost reduction for future deferred ITC amortization 1,703 1,765 Insurance loss provisions 537 632 Pension plan 938 736 Other 868 4,860 Total deferred tax assets 51,321 54,099 Deferred tax liabilities: Utility plant, principally due to depreciation differences 79,348 78,894 Premium on early retirement of bonds 789 825 Total deferred tax liabilities 80,137 79,719 Net deferred tax liabilities $28,816 $25,620 38 CALIFORNIA WATER SERVICE GROUP Pension Benefits Other Benefits In thousands 2001 2000 2001 2000 Accrued benefit costs $(4,685)  $(3,477) $(5,207)  $(4,354) Additional minimum liability (1,396) (1,363) — — Intangible asset 580 877 — — Accumulated other comprehensive loss 816 486 — —  Net amount recognized $(4,685) $(3,477) $(5,207)  $(4,354) Pension Benefits Other Benefits 2001 2000 2001 2000 Weighted average assumptions as of December 31: Discount rate 7.00% 7.25% 7.00% 7.25% Long-term rate of return on plan assets 8.00% 8.00% 8.00% 8.00% Rate of compensation increases 4.25% 4.50% — —  Pension Benefits Other Benefits In thousands 2001 2000 2001 2000 Change in benefit obligation: Beginning of year $59,098  $ 55,692 $ 12,052 $10,195 Service cost  2,786 2,846 625 544 Interest cost 4,333 4,079 858 790 Assumption change 1,326 825  1,943 394 Plan amendment 11 1,215 — — Experience (gain) or loss 2,289 (34) 15 558 Curtailment gain — (1,347) — — Benefits paid (9,484) (4,178) (785) (429) End of year $60,359 $ 59,098 $ 14,708 $12,052 Change in plan assets: Fair value of plan assets at beginning of year $63,648  $ 61,008 $ 2,067 $ 1,561 Actual return on plan assets 1,356 3,140 237 228 Employer contributions 1,820 3,678 781 707 Retiree contributions — — 415 370 Benefits paid (9,484)  (4,178) (1,201) (799) Fair value of plan assets at end of year $57,340 $ 63,648 $ 2,299 $ 2,067 Funded status $ (3,019)  $ 4,550 $(12,408) $ (9,985) Unrecognized actuarial (gain) or loss (6,191) (13,534) 3,339 1,422 Unrecognized prior service cost 4,525 5,279 817 888 Unrecognized transition obligation — — 3,321 3,597 Unrecognized net initial asset — 228 (276) (276) Net amount recognized $ (4,685) $ (3,477) $ (5,207)  $ (4,354)