There shall be maintained for the purpose of paying pensions as herein provided, a fund to be known as the fireman's and policeman's pension fund. Moneys in such fund shall be used exclusively for the payment of pensions as provided herein. All rewards and proceeds of gifts from any source, all emoluments that may be allowed by the council on account of extraordinary service performed by members of the fire or police force and all fines imposed for violation of rules, shall be paid into such fund. There shall be deducted by the city from the pay of each employee member seven [per cent] of his salary[,] which money shall be paid into said fireman's and policeman's pension fund; provided, however, that an employee member who has completed the minimum requirements for normal retirement under Section 18. 3 hereof may elect at any time thereafter to have such deductions terminate in which case his benefits (upon his subsequent retirement or death under the retirement system) shall be based upon his final monthly compensation under the assumption that his final 120 months of service ended with the last date on which a 7% deduction was made from his pay. The city shall appropriate at the end of such regular intervals as may be adopted, quarterly, semi-annually or annually, an amount sufficient to maintain actuarially determined reserves covering pensions payable or which might be payable on account of services performed and to be performed by active employee members and pensions being paid retired members and beneficiaries. Any clerical, legal, actuarial or medical expenses required by the board, or any other necessary expense for the operation of this retirement system[,] shall be provided for by the city.