I have yet to be demoted because our system doesn't seem like it's designed properly for it. So far I've:
1) Been notified that myself, who reports to myself, is applying for a new role on my team and that I should do everything I can to support myself in making the transition easier for myself.
2) I've had an interview scheduled with myself to see if I'm up for the job.
3) Currently I'm negotiating with myself.
The system sees me in the role I am in now and me in the role I want to demote to on my team as two separate people.
This is a third party system provided for us by the way.