Whenever any member of this retirement system terminates his or her membership prior to acquiring a vested right to any retirement benefits and withdraws his or her total employee contributions, plus regular interest, from the funds held by the board, the following shall occur:

(1) The employer's contributions paid to the board on behalf of such withdrawing member shall continue to be held within the funds controlled and administered by the board and shall not be returned to the employer; and

(2) The employer's contributions paid to the board on behalf of such withdrawing member shall be treated as actuarial gains and shall be applied toward the future decrease of employer's contributions and shall not be used or applied to increase retirement benefits to other members of the retirement system.