* L&G covers 3.2 bln stg of pension liabilities
* Premium undisclosed
* Hannover Re takes on 70 pct of risk for 2.2 bln stg
LONDON, Feb 21 (Reuters) - Life insurer Legal & General(L&G) has covered the BAE Systems staff pensionscheme against the risk of members living longer than expected,the largest such deal in Britain.
L&G is taking responsibility for paying the pensions of31,000 retired BAE Systems workers, covering 3.2 billion pounds($4.9 billion) of liabilities, in return for an undisclosedpremium, the insurer said on Thursday.
BAE Systems, Europe's biggest defence contractor, is thelatest employer to insure itself against lengthening pensionerlifespans, which have imposed hefty extra costs on pensionfunds.
In the past three years companies including chemicals groupAkzoNobel, car maker BMW and foodingredients company Tate & Lyle have offloadedso-called longevity risk to insurers and banks, financiallystronger and more adept at dealing with volatile financialmarkets.
L&G is passing on 70 percent of BAE's pension obligations toreinsurer Hannover Re, which said it would receivetotal premiums of 2.2 billion pounds from the deal.
Hannover Re took on 90 percent of a longevity insurance dealL&G negotiated with glass maker Pilkington in 2011.