Trying to get a Federal Job

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tj
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Trying to get a Federal Job

Post by tj » Sun Oct 14, 2018 3:03 pm

I passed the interview and medical screening for an entry level position with the TSA. Now I'm just waiting on the background check. Unfortunately the DHS and TSA don't have the greatest employee morale reviews.

I understand that you can qualify for higher grades with the government just by having a master's degree - would it make sense to invest in a low cost online MBA from the likes of Western Governors University so that I can qualify for a more desirable, better paid position in 2 or 3 years? TSA is "Excepted Service" rather than "Competitive Service". Will that make it more difficult for me to get into a different agency?

I've read on here that a lot of people don't think the pension is as good as it was before because the employee portion is 4.4% instead of 0.8%, but mathematically, doesn't that just mean that as I age, less of my annuity is going to be taxable vs. the folks who contributed only 0.8% to their pension?

I'm 33.5, and if hired, and assuming I don't completely hate working for the government, the "rough plan" would be to stay with the feds until MRA and postpone the annuity to 60, or take an early retirement if they jack up the MRA much higher than it currently is.

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dm200
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Re: Trying to get a Federal Job

Post by dm200 » Sun Oct 14, 2018 3:25 pm

tj wrote:
Sun Oct 14, 2018 3:03 pm
I passed the interview and medical screening for an entry level position with the TSA. Now I'm just waiting on the background check. Unfortunately the DHS and TSA don't have the greatest employee morale reviews.

I understand that you can qualify for higher grades with the government just by having a master's degree - would it make sense to invest in a low cost online MBA from the likes of Western Governors University so that I can qualify for a more desirable, better paid position in 2 or 3 years? TSA is "Excepted Service" rather than "Competitive Service". Will that make it more difficult for me to get into a different agency?

I've read on here that a lot of people don't think the pension is as good as it was before because the employee portion is 4.4% instead of 0.8%, but mathematically, doesn't that just mean that as I age, less of my annuity is going to be taxable vs. the folks who contributed only 0.8% to their pension?

I'm 33.5, and if hired, and assuming I don't completely hate working for the government, the "rough plan" would be to stay with the feds until MRA and postpone the annuity to 60, or take an early retirement if they jack up the MRA much higher than it currently is.
That is a LONG TIME.

While not as good as the CSRS pension system, the FERS pension - along with Social Security and the TSP are very good, in my opinion.

delamer
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Re: Trying to get a Federal Job

Post by delamer » Sun Oct 14, 2018 3:31 pm

I have no direct experience with the TSA or excepted service.

But in the competitive service, you can indeed start at a higher grade with more education, at least in some jobs.

However, you don’t get an automatic bump up in grade if you get an advanced degree once you are already employed.

In the job I held, hiring managers were very skeptical about degrees from solely online and for profit schools. Meaning that they were not likely to hire people with degrees fom those schools, even if they are accredited.

I don’t know if excepted service gives you the same employment boost as competitive service.

Yes, less of your annuity will be taxable when you have to contribute more. But you are stuck with 4.8% regardless, so comparisons to options that aren’t available aren’t really relevant.

tj
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Re: Trying to get a Federal Job

Post by tj » Sun Oct 14, 2018 3:53 pm

Yes, less of your annuity will be taxable when you have to contribute more. But you are stuck with 4.8% regardless, so comparisons to options that aren’t available aren’t really relevant.
I agree - I've just seen a lot of comments say it's not worth going into federal employment anymore specifically because of the change - but I don't see why it's a big deal.

In the job I held, hiring managers were very skeptical about degrees from solely online and for profit schools. Meaning that they were not likely to hire people with degrees fom those schools, even if they are accredited.
It sounds like an inexpensive higher education degree would not be worth pursuing in that case.

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dm200
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Re: Trying to get a Federal Job

Post by dm200 » Sun Oct 14, 2018 3:59 pm

I've just seen a lot of comments say it's not worth going into federal employment anymore specifically because of the change - but I don't see why it's a big deal.
Defined benefit plans have nearly disappeared from the private sector, as have health insurance benefits for retirees - especially after medicare age. These are still provided for federal employees.

From what I have also heard from several federal employees, being 'retired" on disability from the federal government has a lower burden of proof of disability than from the private sector. I even know one person who was heavily pressured into retiring on disability when he did not want to do so.

bhsince87
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Re: Trying to get a Federal Job

Post by bhsince87 » Sun Oct 14, 2018 4:00 pm

tj wrote:
Sun Oct 14, 2018 3:53 pm
Yes, less of your annuity will be taxable when you have to contribute more. But you are stuck with 4.8% regardless, so comparisons to options that aren’t available aren’t really relevant.
I agree - I've just seen a lot of comments say it's not worth going into federal employment anymore specifically because of the change - but I don't see why it's a big deal.

In the job I held, hiring managers were very skeptical about degrees from solely online and for profit schools. Meaning that they were not likely to hire people with degrees fom those schools, even if they are accredited.
It sounds like an inexpensive higher education degree would not be worth pursuing in that case.

It's hard to determine if the current pension is better or worse. But it's still pretty darn good.

You would also qualify for cheap guaranteed health insurance and long term care insurance if you retire early.

I'm 53 and have toyed with the idea of taking a fed job just for the health insurance benefit. But I'd need to work till age 62 to qualify.
Retirement: When you reach a point where you have enough. Or when you've had enough.

delamer
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Re: Trying to get a Federal Job

Post by delamer » Sun Oct 14, 2018 4:01 pm

tj wrote:
Sun Oct 14, 2018 3:53 pm
Yes, less of your annuity will be taxable when you have to contribute more. But you are stuck with 4.8% regardless, so comparisons to options that aren’t available aren’t really relevant.
I agree - I've just seen a lot of comments say it's not worth going into federal employment anymore specifically because of the change - but I don't see why it's a big deal.

In the job I held, hiring managers were very skeptical about degrees from solely online and for profit schools. Meaning that they were not likely to hire people with degrees fom those schools, even if they are accredited.
It sounds like an inexpensive higher education degree would not be worth pursuing in that case.
I haven’t seen that specific comment regarding pensions, but it seems pretty shortsighted to me. Your FERS contributions are refundable if you leave, and give you a decent pension if you stay.

InvisibleAerobar
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Re: Trying to get a Federal Job

Post by InvisibleAerobar » Sun Oct 14, 2018 6:53 pm

tj wrote:
Sun Oct 14, 2018 3:53 pm
Yes, less of your annuity will be taxable when you have to contribute more. But you are stuck with 4.8% regardless, so comparisons to options that aren’t available aren’t really relevant.
I agree - I've just seen a lot of comments say it's not worth going into federal employment anymore specifically because of the change - but I don't see why it's a big deal.
if your contribution all the sudden goes up to 7%, what would you think? what about your annuity based on high-five avg v high-three? lastly, what if it's not COLA-protected? Or what if someone decides that the return of the G-Fund is too generous and decides to lower it by 1%?

all of these proposals have been floated. So if you accept the job, keep your eyes open, as your benefits may get slashed.

delamer
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Re: Trying to get a Federal Job

Post by delamer » Sun Oct 14, 2018 6:57 pm

InvisibleAerobar wrote:
Sun Oct 14, 2018 6:53 pm
tj wrote:
Sun Oct 14, 2018 3:53 pm
Yes, less of your annuity will be taxable when you have to contribute more. But you are stuck with 4.8% regardless, so comparisons to options that aren’t available aren’t really relevant.
I agree - I've just seen a lot of comments say it's not worth going into federal employment anymore specifically because of the change - but I don't see why it's a big deal.
if your contribution all the sudden goes up to 7%, what would you think? what about your annuity based on high-five avg v high-three? lastly, what if it's not COLA-protected? Or what if someone decides that the return of the G-Fund is too generous and decides to lower it by 1%?

all of these proposals have been floated. So if you accept the job, keep your eyes open, as your benefits may get slashed.
But how is that different than any other job?

There are no guarantees. You can only base your decision on the current parameters.

tj
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Re: Trying to get a Federal Job

Post by tj » Sun Oct 14, 2018 7:15 pm

InvisibleAerobar wrote:
Sun Oct 14, 2018 6:53 pm
tj wrote:
Sun Oct 14, 2018 3:53 pm
Yes, less of your annuity will be taxable when you have to contribute more. But you are stuck with 4.8% regardless, so comparisons to options that aren’t available aren’t really relevant.
I agree - I've just seen a lot of comments say it's not worth going into federal employment anymore specifically because of the change - but I don't see why it's a big deal.
if your contribution all the sudden goes up to 7%, what would you think? what about your annuity based on high-five avg v high-three? lastly, what if it's not COLA-protected? Or what if someone decides that the return of the G-Fund is too generous and decides to lower it by 1%?

all of these proposals have been floated. So if you accept the job, keep your eyes open, as your benefits may get slashed.
I don't particularly care about the pension contribution percentage changing, because all that does is change how much of the benefit received in retirement is taxable.

The effect of High 5 vs high 3 would depend on my salaries 2-3 decades from now. It may or may not have a huge impact.

Losing the COLA would absolutely be the worst option out of all the above - but that also effects congress and their pensions, so seems the most unlikely to be implemented?

My previous job didn't even offer a 401(k) plan, so a defined contribution plan with rock bottom investment fees and 5% TSP match on it's own is a huge improvement.

UpperNwGuy
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Re: Trying to get a Federal Job

Post by UpperNwGuy » Sun Oct 14, 2018 8:48 pm

tj wrote:
Sun Oct 14, 2018 7:15 pm
I don't particularly care about the pension contribution percentage changing, because all that does is change how much of the benefit received in retirement is taxable.

The effect of High 5 vs high 3 would depend on my salaries 2-3 decades from now. It may or may not have a huge impact.

Losing the COLA would absolutely be the worst option out of all the above - but that also effects congress and their pensions, so seems the most unlikely to be implemented?
I'm a retired Fed.

You should care about the pension contribution percentage changing, because it means you would pay more to get the same benefit. That's a more important issue than the post-retirement taxes.

I agree with you that high 5 vs high 3 is not a big deal, because few people get really large pay increases in the last five years before retirement.

Don't rely on the assumption that Congress won't tamper with Federal COLAs because it might affect them. The Congress has shown great creativity over the years in protecting itself in such situations. There is a strong desire in certain circles on Capitol Hill to punish both current and former Feds.

ColoRetiredGirl
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Re: Trying to get a Federal Job

Post by ColoRetiredGirl » Sun Oct 14, 2018 10:18 pm

UpperNwGuy wrote:
Sun Oct 14, 2018 8:48 pm
tj wrote:
Sun Oct 14, 2018 7:15 pm
I don't particularly care about the pension contribution percentage changing, because all that does is change how much of the benefit received in retirement is taxable.

The effect of High 5 vs high 3 would depend on my salaries 2-3 decades from now. It may or may not have a huge impact.

Losing the COLA would absolutely be the worst option out of all the above - but that also effects congress and their pensions, so seems the most unlikely to be implemented?
I'm a retired Fed.

You should care about the pension contribution percentage changing, because it means you would pay more to get the same benefit. That's a more important issue than the post-retirement taxes.

I agree with you that high 5 vs high 3 is not a big deal, because few people get really large pay increases in the last five years before retirement.

Don't rely on the assumption that Congress won't tamper with Federal COLAs because it might affect them. The Congress has shown great creativity over the years in protecting itself in such situations. There is a strong desire in certain circles on Capitol Hill to punish both current and former Feds.
+1 to the above and don’t forget many years there will be no pay increases.

BigMoneyNoWhammies
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Re: Trying to get a Federal Job

Post by BigMoneyNoWhammies » Sun Oct 14, 2018 10:35 pm

tj wrote:
Sun Oct 14, 2018 3:03 pm
I passed the interview and medical screening for an entry level position with the TSA. Now I'm just waiting on the background check. Unfortunately the DHS and TSA don't have the greatest employee morale reviews.

I understand that you can qualify for higher grades with the government just by having a master's degree - would it make sense to invest in a low cost online MBA from the likes of Western Governors University so that I can qualify for a more desirable, better paid position in 2 or 3 years? TSA is "Excepted Service" rather than "Competitive Service". Will that make it more difficult for me to get into a different agency?

I've read on here that a lot of people don't think the pension is as good as it was before because the employee portion is 4.4% instead of 0.8%, but mathematically, doesn't that just mean that as I age, less of my annuity is going to be taxable vs. the folks who contributed only 0.8% to their pension?

I'm 33.5, and if hired, and assuming I don't completely hate working for the government, the "rough plan" would be to stay with the feds until MRA and postpone the annuity to 60, or take an early retirement if they jack up the MRA much higher than it currently is.
Keep in mind that for a masters degree to bump you up on the GS pay scale the degree generally has to be relevant to the job in order to replace a year or 2 of the required work experience (ie, a masters in history wouldn't help you applying for a science related job). Also, by the time you finish the degree and spend the $ on it you'll have likely accrued enough additional experience to get the same amount of bump in GS scale anyway. Probably not worth the money if you plan on staying with TSA long term

BigMoneyNoWhammies
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Re: Trying to get a Federal Job

Post by BigMoneyNoWhammies » Sun Oct 14, 2018 10:37 pm

UpperNwGuy wrote:
Sun Oct 14, 2018 8:48 pm
tj wrote:
Sun Oct 14, 2018 7:15 pm
I don't particularly care about the pension contribution percentage changing, because all that does is change how much of the benefit received in retirement is taxable.

The effect of High 5 vs high 3 would depend on my salaries 2-3 decades from now. It may or may not have a huge impact.

Losing the COLA would absolutely be the worst option out of all the above - but that also effects congress and their pensions, so seems the most unlikely to be implemented?
I'm a retired Fed.

You should care about the pension contribution percentage changing, because it means you would pay more to get the same benefit. That's a more important issue than the post-retirement taxes.

I agree with you that high 5 vs high 3 is not a big deal, because few people get really large pay increases in the last five years before retirement.

Don't rely on the assumption that Congress won't tamper with Federal COLAs because it might affect them. The Congress has shown great creativity over the years in protecting itself in such situations. There is a strong desire in certain circles on Capitol Hill to punish both current and former Feds.
As one of those who works on Capitol Hill, I'd say by and large it is the exact opposite. It's the administration that wants big cuts to the retirement and pension programs. There is little to no appetite for this on the Hill/in Congress

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Re: Trying to get a Federal Job

Post by Swansea » Mon Oct 15, 2018 5:25 am

The introduction of the FERS pension in 1984 led to a software program designed to compare it to the CSRS pension, so employees could determine which system was better. The calculations showed the two systems to be identical, however, the programming assumed an 8% annual gain in the TSP. Only a small % of Feds chose the FERS system.
Excepted service appointments carry no advantage when you seek a job in the federal competitive experience, unless you learn skills directly related to the competitive service position, but you still compete with other outside applicants.

rich126
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Re: Trying to get a Federal Job

Post by rich126 » Mon Oct 15, 2018 7:31 am

I've been in and out of the government and am lucky to be "grandfathered" with the 0.8% pension contribution. Working for the government can be a pain if you are someone that likes to be productive and don't like dealing with a lot of red tape (I'm leaving shortly and going for a postponed retirement since I can't imagine doing another 4 yrs.)

Anyhow I was curious about the 4.4% contribution. I'm sure others here are better or maybe use better tools that I did but I ran a quick (too quick?) comparison between the pension and you investing the money yourself.

My assumptions:
Work 35 yrs, avg salary $70K.

1. If you retire with a federal pension then you'd get 35% of 70K (high 3 yr avg, currently) which is $24,500 yearly.
2. If instead you saved 4.4% into a retirement account, assuming 2.9% inflation and a total return of 7% (i.e., 4.1% real) you'd have $455,573.46 at the end of 35 yrs and a 4% withdrawal rate gives you 18,222K.

So with a lot of assumptions (since obviously no one would have the same salary for 35 yrs and 4.4% savings would be less early in the career and more later) it appears you'd be ahead by $6K per year with the pension. Of course the pension ends with your death (or your spouse's death depending on how you set things up) and the $455K would still be there (or some part of it) for your heirs.

Lots of assumptions here, and I'm not claiming I checked this closely, but I was curious how much worse things are now that they keep bumping up the deduction amount and other rumored changes that may occur to the pension.

Of course if you leave the government prior to retiring (i.e. no immediate retirement or a postponed retirement) then the pension gets deferred which is bad for a few reasons. One, you give up access to health insurance. Two, the pension they do give you is limited to the earnings you had prior to leaving the government which will lead to a low pension and the possibility that if you had saved the money in a 401K on your own you'd probably do better.

BigMoneyNoWhammies
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Re: Trying to get a Federal Job

Post by BigMoneyNoWhammies » Mon Oct 15, 2018 10:36 am

UpperNwGuy wrote:
Mon Oct 15, 2018 3:47 am
BigMoneyNoWhammies wrote:
Sun Oct 14, 2018 10:37 pm
UpperNwGuy wrote:
Sun Oct 14, 2018 8:48 pm
tj wrote:
Sun Oct 14, 2018 7:15 pm
I don't particularly care about the pension contribution percentage changing, because all that does is change how much of the benefit received in retirement is taxable.

The effect of High 5 vs high 3 would depend on my salaries 2-3 decades from now. It may or may not have a huge impact.

Losing the COLA would absolutely be the worst option out of all the above - but that also effects congress and their pensions, so seems the most unlikely to be implemented?
I'm a retired Fed.

You should care about the pension contribution percentage changing, because it means you would pay more to get the same benefit. That's a more important issue than the post-retirement taxes.

I agree with you that high 5 vs high 3 is not a big deal, because few people get really large pay increases in the last five years before retirement.

Don't rely on the assumption that Congress won't tamper with Federal COLAs because it might affect them. The Congress has shown great creativity over the years in protecting itself in such situations. There is a strong desire in certain circles on Capitol Hill to punish both current and former Feds.
As one of those who works on Capitol Hill, I'd say by and large it is the exact opposite. It's the administration that wants big cuts to the retirement and pension programs. There is little to no appetite for this on the Hill/in Congress
You must work on the Senate side. The House Budget Committee not only accepted the Administration’s proposal, they increased the cut.
I do indeed. The reality is that what the House does doesn't really matter much most of the time because the vote threshold is 50%+1 and the standing rules in that chamber are such that the majority can pass basically whatever it wants (which includes a lot of nonsubstantive show votes to campaign off of that never have an expectation of being signed into law). Unless something budgetary is passed via Reconciliation, you need 60 votes to pass legislation in the Senate, and the House budget cut you refer to wouldn't get anywhere near that over here. Most Senators across the board have little to no interest in big cuts to pensions or aspects of the retirement system such as TSP, especially for those who have already retired from federal service. Most senators realize that extra benefits derived from working for the government are generally the only thing incentivizing people to be employed by Uncle Sam given that most comparable private sector positions pay a good deal above their federal counterparts. Dramatic reduction of retirement benefits would exacerbate the already existing brain drain Congress and the executive branch agencies have been facing for the last several decades due to salary increase stagnation. Most Senators (aka the adults in the room) realize this.

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dm200
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Re: Trying to get a Federal Job

Post by dm200 » Mon Oct 15, 2018 10:40 am

Swansea wrote:
Mon Oct 15, 2018 5:25 am
The introduction of the FERS pension in 1984 led to a software program designed to compare it to the CSRS pension, so employees could determine which system was better. The calculations showed the two systems to be identical, however, the programming assumed an 8% annual gain in the TSP. Only a small % of Feds chose the FERS system.
Excepted service appointments carry no advantage when you seek a job in the federal competitive experience, unless you learn skills directly related to the competitive service position, but you still compete with other outside applicants.
Since the comparison of CSRS with FERS involved the addition of Social Security Retirement to those with FERS, the comparison would probably be different for lower or higher compensated employees. By design, Social Security Retirement is more heavily weighted in benefits for lower income folks.

I know several folks who chose to stay on CSRS over a relatively long federal employment.

rgs92
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Re: Trying to get a Federal Job

Post by rgs92 » Mon Oct 15, 2018 11:27 am

The best thing about working for the Federal Gov't is that you won't get laid off. Job security is everything.
What good is a job if you are forced into retirement in your 40s?
Or how about if your working life is peppered with multiyear spans of unemployment?
Go with the Fed job and don't look back.

lakpr
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Re: Trying to get a Federal Job

Post by lakpr » Mon Oct 15, 2018 2:03 pm

rgs92 wrote:
Mon Oct 15, 2018 11:27 am
The best thing about working for the Federal Gov't is that you won't get laid off. Job security is everything.
What good is a job if you are forced into retirement in your 40s?
Or how about if your working life is peppered with multiyear spans of unemployment?
Go with the Fed job and don't look back.
In return for that supposed job security, the Fed workers: (a) generally get paid lower than their counterparts in the private sector, (b) get furloughed every two years whenever budget fights erupt without pay

I am saying that as a person who works in the private sector, and have no skin in the game (no relatives who are fed workers, etc.). I don't envy the Fed workers

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dm200
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Re: Trying to get a Federal Job

Post by dm200 » Mon Oct 15, 2018 2:08 pm

lakpr wrote:
Mon Oct 15, 2018 2:03 pm
rgs92 wrote:
Mon Oct 15, 2018 11:27 am
The best thing about working for the Federal Gov't is that you won't get laid off. Job security is everything.
What good is a job if you are forced into retirement in your 40s?
Or how about if your working life is peppered with multiyear spans of unemployment?
Go with the Fed job and don't look back.
In return for that supposed job security, the Fed workers: (a) generally get paid lower than their counterparts in the private sector, (b) get furloughed every two years whenever budget fights erupt without pay

I am saying that as a person who works in the private sector, and have no skin in the game (no relatives who are fed workers, etc.). I don't envy the Fed workers
Taking total compensation into account - I do not agree that is universally true.

The folks who actually lose money in government shutdown messes are often contractors.

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Re: Trying to get a Federal Job

Post by LadyGeek » Mon Oct 15, 2018 3:20 pm

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dm200
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Re: Trying to get a Federal Job

Post by dm200 » Mon Oct 15, 2018 4:01 pm

It is, I believe, important to know and understand that federal employee pay raises are (or can be) in the budget approved by Congress and signed by the President (or otherwise take effect).

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