Where a member opts to draw down their accrued pension, the negative DC pot relating to their membership to date should be applied at the point of flexible retirement.

Where the member elects to draw down only a proportion of their accrued pension, the pension debit should be calculated based on a pro-rated negative DC pot (based on the proportion of the accrued pension being drawn down). The benefit reduction calculations should be carried out consistently with those described in the relevant section of this guidance (Age Retirement, Early Retirement or Late Retirement).

Recovery in respect of Scheme Pays should start with the earliest tax year first, and then sequentially through the tax years until the appropriate percentage recovery is made.

The remaining negative DC pot will continue to attract interest to retirement, where it will then be converted into a benefit reduction.