I have a query regarding the treatment of changes in assumptions in this part of the question.
The model answer states that an increase in expected salary growth or a decrease in the probability of employees leaving would increase the current service cost.
I understand that these changes would increase the expected benefit liability. However, wouldn't the increase arising from revised salary growth and employee retention assumptions be treated as an actuarial remeasurement rather than current service cost?
For example, if fewer employees are expected to leave, more employees are expected to qualify for the benefit. Although this increases the expected liability, it is due to a change in the retention assumption rather than additional services provided during the current year.
Could someone please clarify why the model answer links these changes to an increase in current service cost?