The agreement of any employer to contribute on account of its employees shall be irrevocable, but should any employer for any reason become financially unable to make the contributions on account of its employees as provided in this subchapter, then such employer shall be deemed to be in default. All members of the Vermont State Retirement System who were employed by such employer at the time of default shall thereupon be entitled to discontinue membership in such Retirement System and to a refund of their previous contributions upon demand made within 90 days thereafter. As of a date 90 days following the date of such default, the actuary of the Vermont State Retirement System shall determine by actuarial valuation the amount of the reserve held on account of each remaining active member and beneficiary of such employer and shall credit to each such member and beneficiary the amount of the reserve so held. The reserve so credited, together with the amount of the accumulated contributions of each such active member, shall be used to provide for him or her a paid up deferred annuity beginning at age 65, and the reserve of each beneficiary shall be used in providing such part of his or her existing pension as the reserve so held will provide, which pension, together with his or her annuity, shall thereafter be payable to him or her. The rights and privileges of both active members and beneficiaries of such employer shall thereupon terminate, except as to payment of the deferred annuities so provided and the annuities and pensions, or parts thereof, provided for the beneficiaries. (Added 1971, No. 231 (Adj. Sess.), § 4.)