The State could terminate the Agreement in whole or in part by giving at least two years advance notice in writing to SSA. The coverage must have been in effect at least five years before SSA receipt of the notice. This meant five years actual coverage from the effective date of the first coverage and not five years from the date of execution of the Modification that provided the coverage. The two-year period ran from the date the notice was mailed or delivered to SSA and not the date of receipt.

The termination could have applied to any absolute coverage group. For example, coverage for a proprietary function coverage group could have been terminated without terminating coverage for the governmental function coverage group. This could have been done even though the coverage groups were not separately identified when the coverage was provided. A retirement system coverage group was not a coverage group for termination purposes.

The Secretary could have terminated an Agreement, in whole or in part, if the State failed to comply or was no longer legally able to comply with the Agreement. The State must have been given reasonable notice and opportunity for a hearing. The termination action must have been taken within two years of the notice of the intent to terminate unless the State was again in compliance with the terms of the Agreement. Termination by the Secretary was generally limited to cases in which an entity had ceased to exist.