By Simon Miller

The London Stock Exchange (LSE) has taken steps to protect against risks to its pension scheme with an agreement with the Pension Insurance Corporation (PIC).

On 7 April 2011, trustees of the LSE's UK defined benefit pension plan signed an agreement with PIC to insure for a premium of around £158m all future payments to scheme members who were pensioners at 31 March 2011.

The move is designed to eliminate any investment, inflation, and mortality risks associated with these benefits.

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

The contract includes an obligation to insure future retirements over the next five years on consistent pricing terms for a total premium currently estimated to be £45m.

The agreement came as the LSE announced a 22% increase in operating profits to £341.1m.

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