I am grateful to the hon. Member for Eastbourne for the points that he made and I believe that I can give him the reassurance that he seeks.

Together, clauses 20 and 21 establish the test scheme standard for defined benefit schemes that are not contracted out of the state second pension. The test is conducted by comparing the benefits payable in the scheme with those payable in a hypothetical test scheme, and the features of the test scheme are set out in clause 21. Clause 20 sets out instructions for conducting the comparison.

The test scheme standard is a benchmark for occupational pension saving and has been set at a level that would broadly put a median earner on course to achieve the sort of replacement rate recommended by the Pensions Commission. Those schemes contracted out of the state second pension will automatically meet the qualifying criteria, because to be contracted out, schemes must already pass the reference scheme test set out in the Pensions Act 1993. Rather than introduce a new test for those schemes, we have set that as the qualifying requirement for the purpose of the employer duty in this measure.

Those schemes that are not contracted out will meet the qualifying requirements through the test scheme standard. That has been developed by simplifying the principles from the existing reference scheme test, and the amendment would require the test scheme standard to be conducted on a different basis from the reference scheme test. Employers conducting the test would be prevented from looking at the average benefits paid to members of the scheme. That is the answer to the hon. Gentleman’s question about what “as a whole” means.

Requiring an individualised calculation in respect of each member of the scheme, which would be the effect of the amendment, would place a significant burden on any employer seeking to meet the test, with a risk that the whole scheme would fail if even one member’s pension did not meet the standard.