Defence group BAE Systems, whose pension liability is among the largest in the FTSE 100, has insured a UK record £3.2bn of commitments to members of one of its retirement schemes.

BAE has signed a longevity insurance arrangement with Legal & General to transfer the risk of the 31,000 members of its 2000 Pension Plan living longer than expected. The deal covers liabilities worth £2.7bn as calculated on a funding basis on December 31. This rises to £3.2bn when measured using the Libor swap curve - a standard industry metric - on February 15.