The Irish utility ESB has settled a dispute with unions over one of its pension schemes, accepting a settlement under which it will recognise the fund as a defined benefit (DB) arrangement.

The Electricity Supply Board previously reclassified the ESB General Employees’ Superannuation Scheme from a DB to a defined contribution (DC) arrangement to “address the actuarial deficit arising on this scheme”, the company said in its most recent annual report.

The Labour Relations Commission was asked to mediate in the dispute, with both parties coming to agreement over the weekend.

In a statement, the ESB Group of Unions said: “The resolution is on the basis of the union mandate to protect the ESB Pension Scheme as a defined benefit pension scheme and to maintain existing agreements being fully met.

The union added that as a result of the agreement, a threatened strike would no longer go ahead.

In a separate note, the union also summarised the Commission’s decision, noting that the general employees’ pension fund would once again be regarded as a DB scheme.

The note added: “Whenever deficits arise in the scheme the established practice is that the parties engage with each other to agree arrangements to deal with such deficits.

“The parties are fully agreed that should deficits arise in the scheme at any time in the future they will engage together in line with normal practice to seek agreement in relation to that matter.

ESB did not reply to a request for comment, but following the announcement that the Commission would intervene, chief executive Pat O’Doherty said the company would do everything it could to avert a strike and resolve the situation.