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* L&G wins bulk annuity deal from TRW Automotive
* Brings L&G's 2014 bulk deal total to 8.3 bln pounds
* UK combined final salary assets more than 1 trln pounds
* Insurers eye more deals after recent UK pension reforms (Adds bullet points, detail, background, quotes)
By Carolyn Cohn and Freya Berry
LONDON, Nov 27 (Reuters) - Insurer Legal & General has won a contract to take on 2.5 billion pounds ($3.95 billion)of risk from TRW Automotive's pension scheme and insureover 22,000 of its pensioners, as firms seek to offload costlypension liabilities.
Many British companies' defined benefit - or final salary -schemes are in deficit, hampered by low interest rates whichmake it harder to achieve the investment returns needed to paypensioners in the scheme.
British insurers meanwhile, are looking to fill a gap intheir business through such "bulk annuity" deals after pensionreforms this year halved sales of individual annuities, whichprovide pensioners with an income.
Legal & General (L&G) has been working with TRW's pensionscheme since 2007 and the deal announced on Thursday materiallyde-risks the remaining pension obligations of TRW according toNeil Marchuk, chair of the firm's Trustee Board. The scheme hadassets of 3.5 billion pounds as of March 31.
L&G has won 8.3 billion pounds of annuity deals this year,it said in a statement on Thursday, including a 3.0 billionpound bulk annuity deal with the ICI Pension Fund.
"2014 has been a landmark year in the pension de-riskingmarket with the two largest bulk annuity transactions in the UK,both with Legal & General," said Kerrigan Procter, ManagingDirector, Legal & General Retirement.
The British defined benefit pension market totals more than1 trillion pounds, according to industry estimates, with around11 billion pounds in bulk annuity deals agreed this year.
L&G has captured the majority of this year's transactionsbut other insurers such as Prudential and Standard Life are also active. The process is complex, with the insurerassessing the life expectancy of each individual pensioner.
Most defined benefit schemes are closed to new members andmany companies do not want to act as manager for a pensionscheme that has little to do with their day to day business orexisting employees, according to David Ellis, principal atMercer, lead adviser on the deal.
Insurers, meanwhile, are seeking to put their pensionsexpertise to new use following the pension reforms, announced inMarch and effective from April 2015.
"It's a happy marriage," Ellis said.
Pension liabilities can be a drag on a company's shareprice. Funding of defined benefit schemes deteriorated by ninepercentage points to 88 percent between March and Sept 2014 dueto lower gilt yields, according to pensions industry data.
(1 US dollar = 0.6346 British pound) (Editing by Simon Jessop and Elaine Hardcastle)
