A more thorough explanation:

Actuarial surplus is an estimate of the excess amount of money a pension plan has in its assets compared to its expected current and future liabilities. This includes the amount of money needed to fund future benefit payments.

For example, if a pension plan has $10 million in assets and its expected liabilities are $8 million, then the actuarial surplus would be $2 million. This means that the plan has more than enough money to cover its current and future obligations.

Another example would be if a pension plan has $15 million in assets and its expected liabilities are $20 million. In this case, the plan would have an actuarial deficit of $5 million, meaning it does not have enough money to cover its future obligations.

Actuarial surplus is important because it helps pension plan administrators determine if they have enough money to cover their obligations to plan participants. If a plan has an actuarial surplus, it may be able to offer additional benefits or reduce contributions from plan participants. On the other hand, if a plan has an actuarial deficit, it may need to increase contributions or reduce benefits to ensure it can meet its obligations.