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DXC UK pension scheme agrees $1.3 billion insurance deal with PIC

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LONDON (Reuters) - DXC Technology's UK pension scheme EDS 1994 has agreed a 1.1 billion pound ($1.3 billion) insurance deal with Pension Insurance Corporation, PIC said on Thursday.

The buy-in deal covers all of the scheme's 5,300 members, PIC said in a statement.

Defined benefit, or final salary, pension schemes are increasingly looking for insurance, as sponsoring employers seek ways to remove risk from their balance sheets.

Rising interest rates have made it cheaper for such schemes to pay the required insurance premium, said Ben Stone, risk transfer partner at consultants Mercer, which advised the pension scheme trustee.

Higher rates mean insurers need to hold less capital upfront to pay future liabilities.

The transaction was the largest publicly announced UK pensions insurance deal so far this year, Stone said.

Britain is likely to see around 35 billion pounds in pensions insurance deals this year, up more than 25% from 2021, consultants Hymans Robertson said this week.

($1 = 0.8445 pounds)

(Reporting by Carolyn Cohn; editing by David Evans)

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