LSE and Pension Corp sign pension deal

* LSE to move some pension liabilities to Pension Corp

* Deal latest in trend to pass pension risk to insurers

* Buy-in deal worth $255.8 million

By Sarah Mortimer

LONDON, May 16 - The London Stock Exchange's (LSE.L) defined benefit scheme will shift a portion of its pension liabilities to insurer Pension Insurance Corporation, the latest in a series of deals by British companies seeking to pass on pension risk.

The 158-million-pound ($255.8 million) buy-in deal allows the LSE to insure against any investment, inflation or mortality risks associated with these benefits against all future payments to scheme members who were pensioners at 31 March 2011, the LSE said in an announcement.

The surplus on the Group's UK defined benefit pension plan increased to 37.6 million pounds at 31 March 2011, the LSE said.

"The actuarial liability of these benefits at 31 March 2011 was 140.5 million pounds, with the excess of the insurance premium over the liabilities being funded from the plan surplus," the LSE said.

According to the terms of the contract, Pension Corp. will receive a further 45 million pounds to cover pension payments for all scheme members who retire over the next five years. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a story on deals in the UK click on [ID:nLDE71E1NT] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Pension Corp said it was seeing a "swell of activity" from companies looking to insure all or part of its pension liability risk to insurers and reinsurers.

"Financial analysts are increasingly sensitive to pension scheme volatility and the demands this can make on the company," said Jay Shah, co-head of business origination, at Pension Corp.

On Monday, the LSE's shares rose sharply as analysts said the LSE could find itself vulnerable to a bid if its planned tie-up with Canada's TMX (X.TO) falls apart following a counter offer for TMX. [ID:nLDE74F08H] (Editing by Louise Heavens) (To join the Thomson Reuters Insurance Linked Securities Community for more news and analysis, click here)