NCR. Corp. announced it has agreed to shift its $1 billion U.K. pension plan, which covers 5,400 current and former employees, to a British insurance company.

Under the agreement, which NCR said is part of its pension transformation strategy, the Pension Insurance Corp. will assume the obligations for paying benefits to all participants. In exchange, NCR, of Duluth, Ga., will pay a premium to the insurer.

“The agreement … is part of the third phase of NCR’s pension transformation strategy that aims to reduce our global liability and increase recurring free cash flow,” said John Boudreau, vice president and treasurer of NCR, in a statement. “We are pleased that the Plan will maintain a robust financial footing and expect to take additional steps to accomplish a full buyout.”         

As part of its strategy to cut the costs of its pension obligations, NCR moved the assets of its frozen defined benefits plan into fixed income instruments. Last year, the company offered U.S. vested, non-retired pension plan participants the option of taking a lump sum payout. It also contributed $800 million to the fund to decrease its unfunded liabilities.

As of Dec. 31, NCR's international pension fund assets totaled $2.3 billion with 60 percent to 70 percent of those assets invested in fixed income instruments.

NCR, which makes ATMs and self-checkout machines, employs 26,000 workers and does business in 180 countries. Its 2012 revenue was $5.7 billion.