Hi, The question is list the sources of surplus or deficit of a final pension salary scheme. Now, one of the points is mortality rates of dependants. I'm assuming this is because the pension is payable to the dependant and the payment will stop when the dependant dies. Is my understanding right?
Yes. When the real world differs from that which has been assumed in the calculation of the pension liability, then it becomes a source of surplus or deficit. Dependants not living as long as expected would be a source of surplus.
