* 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 pension scheme against the risk of members living longer than expected, the largest such deal in Britain.
L&G is taking responsibility for paying the pensions of 31,000 retired BAE Systems workers, covering 3.2 billion pounds ($4.9 billion) of liabilities, in return for an undisclosed premium, the insurer said on Thursday.
BAE Systems, Europe's biggest defence contractor, is the latest employer to insure itself against lengthening pensioner lifespans, which have imposed hefty extra costs on pension funds.
In the past three years companies including chemicals group AkzoNobel, car maker BMW and food ingredients company Tate & Lyle have offloaded so-called longevity risk to insurers and banks, financially stronger and more adept at dealing with volatile financial markets.
L&G is passing on 70 percent of BAE's pension obligations to reinsurer Hannover Re, which said it would receive total premiums of 2.2 billion pounds from the deal.
Hannover Re took on 90 percent of a longevity insurance deal L&G negotiated with glass maker Pilkington in 2011.