Aero enginemaker Rolls-Royce has reached a deal with the trustees of its pension fund to offset the risk of pension scheme members living longer than expected.

Rolls, the world's second-largest maker of aircraft engines behind U.S. group General Electric Co , on Monday said the longevity swap deal it had agreed would give additional security to all members of the company's final salary pension scheme.

The contract with Deutsche Bank reduces the risk on approximately 3 billion pounds of the fund's liabilities. The cost of this transaction will be borne by the pension fund and will have no material effect on the funding arrangements, said Andrew Shilston, Rolls-Royce's finance director.

We have made sure that as our pensioners live longer in retirement we have made proper provision for them.

Rolls, which makes engines for planemakers Airbus and Boeing , said around 37,000 pensioners would be covered by the agreement.

We have been working closely with Rolls-Royce for some years to enhance the security of all our members' benefits. This is another important step forward, said Paul Spencer, the chairman of Rolls-Royce's pension fund trustees.

Earlier this month Rolls-Royce said it had performed well in the third-quarter and expects to deliver strong growth in full-year profit, shrugging off turmoil in financial markets.

Shares in Rolls-Royce, which have risen 16 percent in the last three months, closed at 678 pence on Friday, valuing the business at around 12.7 billion pounds.

($1 = 0.6458 British pounds)

(Reporting by Rhys Jones; Editing by Matt Scuffham)