Whenever any amount is refunded as provided in Sections 8-168 and 8-169, except in the case of a male employee who becomes a widower while in service after he becomes age 65, the amounts to the credit of the male employee from contributions by the city shall be transferred to the prior service annuity reserve. Thereafter, except as otherwise provided in Section 8-172.1, any such amounts shall become a credit to the city and, with interest thereon at the effective rate, be used to reduce the amount which the city would otherwise pay during a succeeding year.