Tag Archives: employee benefits

Should You Reimburse for Continuing Education?

Offering the right benefits can give your company a competitive advantage in terms of recruiting and retention. However, you need to be sure that the benefits you offer are financially feasible and have a favorable ROI. One trend that’s catching on is reimbursing employees for continuing education. Does it make sense for your business, and will it add to your bottom line?


The Pros

Develop Your Employees

As an employer, it’s only natural to be invested in your staff. Their personal success inevitably contributes to the success and growth of your company. Reimbursing employees for continuing education improves their knowledge and develops their skills, which they can then utilize to become better employees. This can translate into improved performance, increased output and more.


It Can Increase Loyalty and Morale

Offering this benefit shows your team members that you want to see them flourish. You don’t merely view them as cogs in the machine, but you genuinely want them to thrive. This can quickly breed loyalty and raise morale. In turn, employees are likely to put forth a greater effort and go the extra mile for you.


It’s Tax Deductible

You should also know that you can deduct this benefit as a business expense. According to BizFilings, “Educational assistance programs allow employers to provide employees with educational assistance of up to $5,250 annually excluded from an employee’s income. Employers can claim a business deduction for educational employee benefits paid and are not required to pay FICA or FUTA payroll taxes for benefits provided under the program.”


The Cons

Upfront Costs

Tuition costs can be expensive. According to the College Board, “The average cost of tuition and fees for the 2016–2017 school year was $33,480 at private colleges, $9,650 for state residents at public colleges, and $24,930 for out-of-state residents attending public universities.”

Although you may not pay an employee’s entire tuition, this can still be a major expense, especially if you’re offering it to multiple employees. If you’re a new company or operating on a minimal budget, it may simply not be feasible.


Scheduling Conflicts

It’s not always easy to juggle higher education with a full-time or even part-time career. Combine this with raising children and other obligations and it can create issues with scheduling. Not to mention an employee’s performance can diminish if they’re fatigued with a full plate.


Employees May Look for Greener Pastures

There’s also the potential for this benefit to backfire. In some cases, employees will develop their skills, improve their education and ultimately leave for a higher paying job. In this scenario, all of the money you funneled into reimbursing their continuing education will be futile and you’re wasting resources.

It’s good to explore different benefits to offer your employees. Reimbursing employees for continuing education is becoming more and more popular and makes sense in certain situations. Carefully weighing the pros and cons should help you determine if it makes sense for your company so that you can make an informed decision.


Is Student Loan Forgiveness an Option to Lure New Employees?

Recruiting can be brutal. Not only must you acquire top industry talent, you need to retain your employees long-term. This can be difficult, especially when it comes to millennials who have a penchant for chronic job hopping. One benefit that’s gaining ground is student loan forgiveness.


An Enticing Proposition

A significant number of Americans are plagued with student loan debt. The College Investor points out, “Roughly 43 million people have student loans, and the U.S. workforce is roughly 144 million people, which means almost one in three workers have student loans.” In theory, a third of potential new hires have student debt they need to pay off.

You can bet that student loan forgiveness looks very appealing to many job seekers, especially millennials. A survey from Student Loan Hero found that nearly 46 percent of employees would prefer student loan payment assistance over a 401(k) retirement plan. This number is even higher among 18 – 24-year-olds where 54 percent would choose this option. If you’re specifically targeting younger employees in your recruiting efforts, this can give you an upper hand over competitors.


Companies Offering This Benefit

At the moment, only three percent of companies currently offer student loan forgiveness. Some notables include Chegg, Fidelity, and Kronos. However, it’s definitely a trend that’s catching on. More companies are realizing that there’s a genuine need for financial assistance, and it’s something that many job seekers respond to. Forbes even lists student loan forgiveness as the hottest benefit of 2017.


Lawmakers Take Notice

As of now, there is only tax-free tuition reimbursement but no tax-free student loan repayment. However, this may change in the near future as a bill was recently introduced in early January 2017 called The Student Loan Repayment Assistance Act of 2017.

The act enables employers to make tax-free repayments of their employees’ student loans as well as provide a business-related tax credit. With the cost of higher education being at an all-time high, lawmakers are working to provide relief in any way they can. This added incentive would make loan forgiveness even more popular among companies.


Is It Right for Your Company?

It’s safe to say that this could be a smart move if your company is looking for an edge in recruiting. It should be especially effective if you’re looking to recruit bright young talent. With such a small percentage of companies currently offering this benefit, it can make your company stand out from the pack.

The great thing about student loan forgiveness is that it can also be structured to improve retention. An example is Natixis Global Access Management, which pays a lump sum of $5,000 to employees who have been with the company for five years and $1,000 annually for up to five more years. Of course you can create your own terms, but this just shows how this benefits aids in both recruiting and retention.

It will be interesting to see how offering student loan forgiveness as a benefit will play out. Although it’s only currently offered by a small number of companies, it’s likely to catch on, especially if the Student Loan Repayment Assistance Act of 2017 is passed.


Creating a Total Rewards Program: Compensation and Benefits

Many employers are becoming increasingly concerned with how to sustain and recruit a high-quality workforce while also maintaining costs.

What steps are you taking to make sure that you are an employer of choice? How are you promoting the full value of your company and your offerings?


Total Rewards Concept

Establishing a total rewards program is not a new concept for employee recruitment and retention. For years, employer groups have produced total compensation or “hidden paycheck” statements that detail compensation and benefits costs. These programs are extremely important in improving recruiting and retention strategies in a tight labor market.

Total rewards programs provide monetary, beneficial and developmental rewards to individuals within an organization who meet specific goals. These incentives are perceived to be of value in the employment relationship, including:

  • Base and variable pay
  • Group insurance (medical, dental, life, retirement, savings, etc.)
  • Paid time off (PTO)
  • Recognition programs
  • Training and career opportunities


These elements are interdependent and may have different values and importance to each person. Ultimately, the outcome of a total rewards approach is to provide each individual with a combination of monetary and non-monetary rewards to motivate them to maintain desired business performance.


Weighing the Options

The Top Five Total Rewards Priorities Survey, sponsored by Deloitte Consulting and the International Society of Certified Employee Benefit Specialists (ISCEBS), surveyed Human Resources professionals from 22 countries around the world (in the Americas, Europe, the Middle East and Asia Pacific). Respondents were to represent their company’s views on many questions and to share personal opinions on others.

Despite differences in political and cultural climates, 35 percent of respondents reported that their top challenge in the coming years is to find, motivate and retain top talent.
Other challenges listed include the rising cost of total rewards, being able to afford significant pay increases in a cost reduction environment, navigating through uncertain economic conditions and anticipating new tax and regulatory requirements, and providing meaningful total rewards to employees.

When asked about changes employers planned to implement to their total rewards programs over the next 12 months, responses were as such:

  • Increasing health and well-being initiatives (43 percent)
  • Definition, mix of components, and/or redesign of overall rewards strategy (40 percent)
  • Alignment with organization strategy and brand (34 percent)
  • Differentiation by employee group (workforce segmentation) (23 percent)
  • Differentiation by business unit (14 percent)
  • Significantly reducing total rewards investment (8 percent)


Re-evaluation, redesign, alignment and differentiation of programs seem to be the most popular strategies among employers. To cater to your employees and determine what they value and prefer to receive in exchange for their time and talent, consider using surveys, focus groups and exit interviews to gather the needed information. Plus, on a consistent basis, communicate with employees concerning what incentives are offered and how they can take advantage of the rewards in their unique circumstances.


Creating and Implementing a Total Rewards Program

To create an effective total rewards program at your organization, consider putting together a team of individuals to assess your current benefits package and how it helps your company achieve its goals. If you find that you are not meeting the organization’s objective, then implementing or enhancing a total rewards program may be the right strategy for you.

Here’s how to develop a solid program:

  • Ask management to identify and analyze various rewards strategies to determine what would suit your workplace best. Consider pay rewards, nontraditional benefits and personal development opportunities to further company objectives.
  • Implement the new system by publicizing it to your employees and educating management personnel.
  • Train employees on how they can use the program to achieve results for personal success and for company goals.
  • Evaluate the program’s effectiveness and make necessary changes to further achieve your goals.


To help employees understand the concept of total rewards, there are many online tools that will allow them to view information on benefits and compensation statements, learning opportunities, paid time off, educational reimbursement policies, wellness activities, and career development and recognition programs.

Consider implementing a total rewards program or revamping your current one to meet the company’s needs and the needs of individual employees in order to increase the value of your investment.

For the complete results of the ISCEBS and Deloitte Consulting survey, visit: www2.deloitte.com/us/en/../top-five-rewards-survey-2014.html



Why Strategic Benefit Planning Makes Sense

Competitive employee benefits packages are essential for attracting and retaining quality employees, but continuing to offer them can be tough with the rising cost of health care squeezing an already tight budget. Cutting benefits may seem like a necessary reality for some companies, but could have serious long-term consequences.

Retaining employees throughout these rocky economic times is vital so that your company remains competitive and positioned favorably in its industry when the economy rebounds. One remedy could be implementing a strategic benefit plan, which will help you find ways to contain or even cut costs while still offering competitive benefits.

What is a strategic benefit plan?

A strategic benefit plan is a three-to-five-year plan crafted by you and your Libertate Insurance representative that outlines goals, strategies and action plans in regards to your employee benefits program. In creating the plan, you and your broker will strategically analyze ways to contain costs through various plan improvements. This approach is a methodical and logical long-term approach to benefit planning, as opposed to making decisions year to year, and will provide a thought-out road map for your future benefits.

What are the benefits of implementing one?

At the company level, creating a strategic benefit plan will help greatly with internal budget planning and can also be incorporated into your corporate strategic plan. This will bring HR and employee benefits into larger strategic conversations and ensure that a competitive benefits package continues to be available.

Employees will also see the benefit from a strategic benefit plan in many ways. First of all, by finding ways to cut and contain costs for the company, the employee will likely reap some of the savings as well. In addition, this type of plan will provide assurance for employees worried about their benefits. Next to job security, employees worry most about their benefits and compensation, namely that they could be reduced or cut at any time.

Studies have shown that workplace morale is strongly linked to the quality of employee benefits, so reassuring employees that their benefits will continue is a beneficial move for companies. The strategic benefits plan can include an employee communication initiative, which will keep employees informed and assured on the future status of their benefits package.

Voluntary Benefits – A Win-Win for Employers and Employees

As health care costs continue to rise, so has the demand for voluntary benefits. Since many employers find it increasingly difficult to provide employees with a complete benefit package, voluntary benefits have become an ideal solution. Voluntary benefits allow employers to offer benefits that are attractive to employees without added cost to the company. Employees benefit because they have a variety of insurance options available conveniently in one place, and often with lower premiums than individual polices they would have bought themselves.

What are voluntary benefits?

Voluntary benefits are coverages and products made available to employees for elective purchase. These programs have four key characteristics:

  • 100 percent employee-paid
  • Offered through an employer
  • Solicited and enrolled through a carrier or enrollment firm
  • Paid through automatic payroll deductions

Because of their cost efficiency and portability, as well as their contribution to an employee’s work-life balance, voluntary benefits are becoming a central component of many companies’ overall benefits strategies.

What are some common voluntary benefits?

  • Permanent life insurance
  • Disability income insurance
  • Accidental death and dismemberment (AD&D)
  • Supplemental health insurance
  • Long-term care insurance
  • Retiree medical insurance
  • Dental/vision insurance
  • Auto/homeowner’s insurance
  • Prepaid legal services
  • Pet health insurance
  • Identity theft insurance
  • Computer purchase programs
  • Adoption assistance

Why should employers consider expanding their benefit offerings to include voluntary benefits?

  • Trends show employees have strong emotional appeal towards these benefits and have come to expect them
  • Usually there are no fees or costs for employers
  • They complement the goals of most corporate work/life programs
  • They offer easy implementation (most do not have legal and regulatory issues associated with insurance benefits)
  • They require little post-implementation administration or support

What are some specific advantages to offering voluntary benefits?

Voluntary benefits appeal to both employer and employee needs.


  • Increased expense control in the face of rising benefits costs
  • Cost-effective way to supplement benefits cuts or reductions
  • Important tools for attracting and retaining valued employees
  • Differentiate themselves for competitors (both in offerings and image)


  • Opportunity to access a broader array of benefits
  • Freedom to choose benefits that best suit their needs
  • Affordable premiums (often deducted on a pretax basis)
  • Portable coverage
  • Easy enrollment process
  • More convenient and time-saving than buying on their own
  • Convenience of payroll deduction
  • No medical exams
  • More lenient underwriting requirements

What process should employers follow when expanding their non-traditional voluntary benefit packages?

Employers wishing to roll out new voluntary benefits must show their support for these products in order for them to take off with employees. Showing support motivates workers to take notice and see the value for themselves and their families.

  • Examine your current benefits package to determine which benefits are popular or not.
  • Talk to employees to determine what voluntary benefits they would prefer.
  • Determine which benefits are offered by your competitors, as current and prospective employees may use this information as a benchmark for evaluating your company.
  • Determine the source(s) of benefits that offer the most value for the lowest cost (this is very important to ensure success of a voluntary program because of employees’ perceived value).
  • Determine enrollment logistics, including methods of enrollment One-on-one enrollment is the most effective means of communication and provides personalized attention.
  • Determine service logistics, including support, new employees, terminated employees and re-enrollments.
  • Initiate an employee communications campaign to educate employees on what voluntary plans are offered and the benefits of electing them.
  • Consider offering benefits multiple times per year, not just during open enrollment. This allows employees to focus on one or two voluntary packages versus being overwhelmed with many packages all at once.
  • Follow up to ensure employees are satisfied and that there are no issues with any of your voluntary benefits.

Are there any fiduciary responsibilities associated with offering voluntary benefits?

Although most employers do not contribute to the cost of this coverage, they still have a fiduciary responsibility under ERISA to police such plans if they engage in the promotion or distribution of benefits information related to these programs or allow payroll-deducted payment on a pretax basis through a Section 125 cafeteria-style plan.

How are voluntary benefits administered?

As the number of available voluntary benefits increases, proportionally more time and resources are required to communicate, administer and manage such programs. Even turn-key products, such as discounts, can be administratively challenging when there are numerous benefits.

To ease this burden, employers can outsource their voluntary benefit and/or discount programs to third party administrators, automated platforms or service providers. These service providers typically charge a per-employee fee for managing the corporate discount program(s).

Consultants have extensive training in all areas of voluntary benefits and offer valuable resources. They can assist employers in negotiating more favorable benefit and cost terms with insurance carriers and enrollment firms, along with supporting the program once it is in place.

Most employers try to avoid paying third party management charges, but these fees may be more affordable than the cost of internally managing the program, and they often yield a more robust program in terms of access, product variety and control.

How are voluntary benefits outcomes measured?

To ensure that voluntary benefits programs are as competitive and effective as possible, employers should measure the success of the programs every 12 to 24 months. Employers can conduct surveys to test employee awareness of, understanding of and satisfaction with the voluntary benefits against those offered by industry peers. Finally, employers can examine participation rates among employees to determine if they are at, above or below industry norms with regard to re-enrollment and persistency.



The Benefits of Implementing an Educational Assistance Program

Today’s companies are more competitive than ever, and there’s an ongoing battle for acquiring and maintaining top talent. That’s why many employers choose to go the extra mile and offer perks to their employees — one of which is an educational assistance program.


What is an Educational Assistance Program?

As defined on Inc.com, an educational assistance program is “A type of employee benefit in which an employer reimburses employees for the costs associated with continuing education. Assistance usually comes in the form of reimbursements for tuition, fees and books.” Simply put, an employer provides financial assistance to employees who wish to pursue an ongoing education. The exact amount of money provided can vary, and it’s often contingent upon employees maintaining a certain grade level.


Why Implement this Type of Program?

Employers choose to provide their employees with educational assistance for many reasons. One of the more common reasons is to increase loyalty so that workers stick around longer and develop a sense of loyalty to their employer. Another reason is to ensure that employees are equipped with the necessary skills to perform their jobs at a high-level. This is particularly important in industries where there’s a lot of change (e.g. tech and engineering), helping to maintain a knowledgeable and adept workforce.

An educational assistance program can also serve as an effective recruiting tool. Millennials in particular can kill two birds with one stone by having a decent job and completing their education without racking up massive debt. It can also be beneficial from a public relations standpoint by enhancing a company’s overall reputation.


The Pros

Information from a survey by the International Foundation of Employee Benefit Plans (IFEBP) found that “Almost 75 percent of organizations say their educational assistance offerings are successful.” More specifically:

  • 45 percent of programs were successful in retaining current employees
  • 44.3 percent kept employees current on evolving skill sets required for the organization
  • 39.4 percent maintained/increased employee satisfaction and loyalty
  • 15.6 percent attracted future talent
  • 12.8 percent maintained/increased productivity and innovation

The data shows an encouraging outcome for companies using educational assistance programs . With nearly three-fourths of companies reporting success, it’s likely to have a positive effect on your company.


The Cons

Perhaps the biggest drawback is that some employees may use the program to “Get an education and run.” Someone who receives a degree after a few years and takes off for a better, higher paying job will leave the company without the fruits of its investments.

Many organizations report only a small number (five percent) of employees participating in the educational assistance program offered. For this reason, it could potentially be a waste of time to set one up and complete the associated administrative tasks.


When considering implementing an educational assistance program, it’s necessary to look at the current state of your business and determine if it would make sense. However, it’s important to note that by and large, the positives outweigh the negatives. Offering this perk to employees can be a smart move in the 21st century.

What Type of Retirement Plan Should You Offer Employees?

Offering a retirement plan to your employees can be mutually beneficial in several ways. Besides improving the well-being of your workers and positively impacting their future, it can be used as a recruiting tool, serve as a motivator for increased productivity and decrease turnover. Additionally, it can often give your business some considerable tax advantages. Which type of retirement plan should you offer?


Defined Contribution Plan

A defined contribution plan is on the Investopedia website as “a retirement plan in which a certain amount or percentage of money is set aside each year by a company for the benefit of the employee.” There are several types of plans that fit under this umbrella including 401(k), 403(b), SIMPLE, etc. When it comes to how much money an employee can pull out of a defined contribution plan, it’s contingent upon how much you and your employee put in and the interest rate.


  • You and your employees have more control over what you contribute
  • You can easily calculate your obligations each year


  • You could potentially incur fines if you’re not compliant with the IRS, HIPAA, ERISA, etc.


Defined Benefit Plan

A defined benefit plan is defined on the Investopedia website as “an employer-sponsored retirement plan where employee benefits are sorted out based on a formula using factors such as salary history and duration of employment.” As an employer, you’ll usually make most of the contributions — and unlike a defined contribution plan, employees receive a fixed amount of money once they retire. Choosing this plan tends to work well for many smaller businesses because there are no employee number requirements.


  • You can often get bigger tax deductions with a defined benefit plan than you could with a defined contribution plan
  • Significant benefits can accumulate within a relatively short period of time
  • Employees can better predict the benefits they’ll receive


  • This tends to be a costly plan to establish
  • It’s complicated from an administrative standpoint
  • You will have to pay an excise tax if either minimum contributions are not made or excess contributions are made


Qualified Retirement Plan

Unlike the previous two types of plans, a Qualified Retirement Plan is also defined on the Investopedia website as “falling outside of ERISA guidelines” and is not eligible for tax-deferral benefits. In turn, they tend to be very flexible and can be customized to the specific needs of individual employees. These aren’t usually used for lower-ranking employees, but instead are designed for those in executive positions. As a result, a qualified retirement plan isn’t geared toward the masses, but can be ideal in certain cases.


  • There is a lot of leeway, and it can be tailored to reach an employee’s exact objectives
  • You can minimize your administrative and funding costs
  • There can be major long-term tax advantages


  • It isn’t practical unless you have high-ranking executive employees
  • You can’t capitalize on deductions until an employee actually retires
  • It comes with greater liability than other plans


There’s no doubt that offering a retirement plan is a great choice for many employers and can be a contributing factor to the long-term success of your business. Understanding the key differences between these common plans allows you to choose the best one that meets the needs of both your company and employees.

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Should You Offer Employees a Cafeteria Plan?

Offering benefits to employees can be an effective recruitment tool and have numerous other advantages for employers. While most benefits target specific areas such as medical or retirement, cafeteria plans are much more flexible and give employees greater control over the types of benefits they receive. As a result, a cafeteria plan can be very appealing to workers, which begs the question: Should you offer your employees a cafeteria plan?


What is a Cafeteria Plan?

A cafeteria plan is “A reimbursement plan governed by IRS Section 125 which allows employees to contribute a certain amount of their gross income to a designated account or accounts before taxes are calculated.” They are also known as Section 125 Plans or flexible spending accounts (FSAs). Simply put, employees can place part of their pre-tax income into a variety of funds to meet their specific needs. For example, they could funnel a portion of their money into healthcare, childcare, dental, life insurance, etc.


Benefits of Cafeteria Plans

Perhaps the most obvious benefit is that this can really work to your advantage in terms of recruiting, and it can help your company attract some of the top talent in your industry. If a highly sought-after job candidate is considering which company to join, they’ll often side with the one who offers the best benefits. This means you can increase your company’s desirability considerably by offering cafeteria plans.

The same could be said when it comes to retaining employees — and it’s reasonable to expect a lower turnover rate when your employees are able to choose from a comprehensive list of benefits that meet their unique needs.

Another plus is that it can minimize your tax and payroll liabilities — and according to Entrepreneur, “Because the pre-tax benefits aren’t subject to federal social security withholding taxes, employers win by not having to pay FICA or workers’ comp premiums on those dollars.” In turn, this can slightly increase your overall profit margins.



There are two main drawbacks when it comes to cafeteria plans. One is that there is an initial set up fee involved. However, it’s important to note that this fee should be offset when you consider your savings in the long run.

The other downside is that you’re going to have to deal with extra paperwork — and it can be a little tricky figuring out all of the details and subtle nuances involved with the process. If you’re already stressed out dealing with piles of documents, the whole process can be an added headache. Fortunately, you can streamline things and have the bulk of the paperwork done for you by outsourcing employee benefits management to a third party.

When you break it all down, offering your employees a cafeteria plan tends to have more pros than cons and makes sense if you’re looking to gain a competitive advantage when it comes to recruiting and employee retention. However, if your employees already feel that their current benefits are sufficient and acquisition/retention isn’t an issue, this may be overkill.


Does Your Company Offer Paternity Leave?

Although there are many milestones in a man’s life, the birth or adoption of a child has to be one of the top. Ideally, new fathers will have adequate time to care for their newborns and help with their early development. While maternity leave is fairly common for women, paternity leave for men doesn’t receive nearly the same attention.

But with new attitudes toward this topic, some employers are getting on board and offering paternity leave. Let’s now dig a little deeper into this matter and see if it’s right for your company.


What is Paternity Leave?

According to Baby Center, paternity leave is defined as “the time a father takes off work at the birth of adoption of a child.” In terms of the length of time allowed off, the Family and Medical Leave Act (FMLA) states that eligible employees can have up to 12 weeks within the first year of a child’s life.

The interesting thing about the U.S. when compared to many other countries is that paternity leave has by no means been a top priority for employers in the past. In fact, there are only three states that currently have paid family leave programs — California, Rhode Island and New Jersey. All of the other states allow eligible fathers to take time off, but it doesn’t have to be paid, and businesses with under 50 employees are exempt.

The question is, “Should you consider offering your employees paternity leave?”


The Pros of Offering Paternity Leave

Because there are only three states that have implemented programs, there’s somewhat limited data to determine what effects it has on profitability and other key areas of business. However, there are a couple of studies that suggest that it has a positive overall impact on both profitability and employee retention.

A study performed by economists on 253 firms in California found that 91 percent of firms that paid family leave had a positive or neutral effect on profitability and employee performance — and 89 percent said the same on productivity. This study also found that it increased employee retention in lower-skilled jobs with the retention rate being 83 percent for companies who offered leave and 74 percent for those who didn’t.

The Boston College Center for Work and Family also conducted a survey that analyzed paternity leave from a recruitment perspective and found that 90 percent of men who were thinking of having another child said it was important to have paid time off when caring for a newborn, and 60 percent said it was extremely or very important.

So when you break it all down, paternity leave can actually improve profitability, increase retention and aid in recruiting. Not to mention that it promotes gender equality in the workplace.


The Drawback of Offering Paternity Leave

One of the biggest negatives of offering paternity leave is that it can potentially be disruptive to operations when a member of your team is absent for an extended period of time. This may create scheduling conflicts and put additional stress on the rest of your staff. In some cases, you may even need to find temporary workers to fill in the gaps until your employee returns. In turn, this can put a strain on operations and potentially be a hindrance to productivity.

When you look objectively at paternity leave, there appear to be more advantages than disadvantages of offering it to your employees. While it’s true that it can temporarily throw a wrench in operations, the overall benefits can be profound.

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