Section 3. (a) The state agency, with the approval of the governor, is hereby authorized to enter on behalf of the commonwealth into an agreement with the Federal Security Administrator, consistent with the terms and provisions of this chapter, for the purpose of extending the benefits of the federal old age and survivors insurance system to employees of instrumentalities, with respect to services specified in such agreement which constitute ''employment'' as defined in section two. Such agreement may contain such provisions relating to coverage, benefits, contributions, effective date, modification and termination of the agreement, administration and other appropriate provisions as the state agency and the Federal Security Administrator shall agree upon, but, except as may be otherwise required by or under the Social Security Act as to the services to be covered, such agreement shall provide in effect that—

(1) Benefits will be provided for employees whose services are covered by the agreement and their dependents and survivors on the same basis as though such services constituted employment within the meaning of Title II of the Social Security Act;

(2) The commonwealth will pay to the Secretary of the Treasury, at such time or times as may be prescribed under the Social Security Act, contributions with respect to wages as defined in section two equal to the sum of the taxes which would be imposed by sections fourteen hundred and fourteen hundred and ten of the Federal Insurance Contributions Act if the services covered by the agreement constituted employment within the meaning of that act;

(3) Such agreement shall be effective with respect to services in employment covered by the agreement performed after a date specified therein, but in no event may it be effective with respect to any such services performed prior to the first day of the calendar year in which such agreement is entered into, or in which the modification of the agreement making it applicable to such services is entered into; and

(4) All services which constitute employment as defined in section two, are performed in the employ of an instrumentality, and are covered by a plan which is in conformity with the terms of the agreement and has been approved by the state agency under section four, shall be covered by the agreement.

(b) Any instrumentality jointly created by the commonwealth and any other state or states is hereby authorized, upon the granting of like authority by such other state or states, (1) to enter into an agreement with the Federal Security Administrator whereby the benefits of the federal old age and survivors insurance system shall be extended to employees of such instrumentality; (2) to require its employees to pay and for that purpose to deduct from their wages contributions equal to the contributions which might be imposed upon them under section four (c) if they were covered by an agreement made pursuant to subsection (a) of this section; and (3) to make payments to the Secretary of the Treasury in accordance with such agreement, including payments from its own funds, and otherwise to comply with such agreements. Such agreement shall, to the extent practicable, be consistent with the terms and provisions of subsection (a) and other provisions of this chapter.