Handfood, employee benefit sd2020

Employee benefit
On 1 January 20X2, Handfood Co introduced an additional benefit to encourage employees to remain in its employment for at least five years. Handfood Co has promised its employees a lump-sum benefit, payable on 1 January 20X7, which is equal to 1% of their salary at 31 December 20X6, provided they remain employed until that date.

The current salaries of employees on 1 January 20X2 are $1·1 million per annum. The directors of Handfood Co have
used the following assumptions:
– Salaries for year ended 31 December 20X2 will remain at $1·1 million.
– Salaries should increase by 3% each year from 1 January 20X3.
– There is a 75% probability that all employees will still be employed by Handfood Co at 31 December 20X6.
The discount rate is 5% per year.
Handfood Co recognises actuarial gains and losses in other comprehensive income. Interest is recognised by Handfood Co on an annual basis. Handfood Co uses the projected unit credit method to measure its defined benefit obligation which means that the current service cost is the increase in the present value of the future defined benefit liabilities. The benefit will be payable from the balance on Handfood Co’s business bank account at 1 January 20X7.
Present value factors 5%
Periods (years)
4 0·823
5 0·784

required:
Discuss the impact on the additional employee benefit for the year ended 31 December 20X3 if Handfood
Co were to take into account the following changes in assumptions:
– an increase in employees’ salaries above 3% per annum; and
– a decrease in the probability of employees leaving the company.

my question:
In the answer, they say that the interest will not be affected but will stay the same at 7700*5%= 385 where 7700 is the service cost.

how is that possible if the service cost will increase due to an increase in salaries and probability of employees leaving? isn’t that contradictory? Also, shouldn’t the interest be calculated on the benefit obligation itself rather than the current service cost?