Is 401(k) vesting period an acceptable (or possible) negotiation point?

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In American business, can the length of time before eligibility in a 401(k) matching program be negotiated? If so, is this considered to be an acceptable line of negotiation for a senior management position, or is it considered a faux pas?







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  • 2




    If you are in a senior management position, you should be negotiating over stock not some trivial 3% match vesting. Additionally, negotiating over vesting terms makes it look like you are not in it for the long haul, which is a very bad thing to convey during negotiations.
    – Bill Leeper
    Feb 13 '14 at 18:42











  • Good point, under some circumstances; but not every organization is publicly held. I'm considering all my options for negotiation and it's helpful to know what is likely to be in play vs. what is not.
    – Roger
    Feb 13 '14 at 19:02










  • Even with privately held companies, there are still options for equity. As other have said, you will not get very far at all with trying to change the 401k matching period. There are far better options for negotiating a better compensation package. If you are looking for short term hits, which it seems you are since you are looking to shorten the vesting schedule, a sign on bonus might be more in line.
    – Bill Leeper
    Feb 13 '14 at 19:21






  • 1




    Hey @Bill, comments are actually intended to seek clarification or help improve a post, not for answering the questions. Since your comments may be removed, you might consider using them as a basis for a solid answer. Please see What comments are not? for more details. Hope this helps.
    – jmort253♦
    Feb 15 '14 at 3:53
















up vote
3
down vote

favorite












In American business, can the length of time before eligibility in a 401(k) matching program be negotiated? If so, is this considered to be an acceptable line of negotiation for a senior management position, or is it considered a faux pas?







share|improve this question
















  • 2




    If you are in a senior management position, you should be negotiating over stock not some trivial 3% match vesting. Additionally, negotiating over vesting terms makes it look like you are not in it for the long haul, which is a very bad thing to convey during negotiations.
    – Bill Leeper
    Feb 13 '14 at 18:42











  • Good point, under some circumstances; but not every organization is publicly held. I'm considering all my options for negotiation and it's helpful to know what is likely to be in play vs. what is not.
    – Roger
    Feb 13 '14 at 19:02










  • Even with privately held companies, there are still options for equity. As other have said, you will not get very far at all with trying to change the 401k matching period. There are far better options for negotiating a better compensation package. If you are looking for short term hits, which it seems you are since you are looking to shorten the vesting schedule, a sign on bonus might be more in line.
    – Bill Leeper
    Feb 13 '14 at 19:21






  • 1




    Hey @Bill, comments are actually intended to seek clarification or help improve a post, not for answering the questions. Since your comments may be removed, you might consider using them as a basis for a solid answer. Please see What comments are not? for more details. Hope this helps.
    – jmort253♦
    Feb 15 '14 at 3:53












up vote
3
down vote

favorite









up vote
3
down vote

favorite











In American business, can the length of time before eligibility in a 401(k) matching program be negotiated? If so, is this considered to be an acceptable line of negotiation for a senior management position, or is it considered a faux pas?







share|improve this question












In American business, can the length of time before eligibility in a 401(k) matching program be negotiated? If so, is this considered to be an acceptable line of negotiation for a senior management position, or is it considered a faux pas?









share|improve this question











share|improve this question




share|improve this question










asked Feb 13 '14 at 16:15









Roger

7,17132644




7,17132644







  • 2




    If you are in a senior management position, you should be negotiating over stock not some trivial 3% match vesting. Additionally, negotiating over vesting terms makes it look like you are not in it for the long haul, which is a very bad thing to convey during negotiations.
    – Bill Leeper
    Feb 13 '14 at 18:42











  • Good point, under some circumstances; but not every organization is publicly held. I'm considering all my options for negotiation and it's helpful to know what is likely to be in play vs. what is not.
    – Roger
    Feb 13 '14 at 19:02










  • Even with privately held companies, there are still options for equity. As other have said, you will not get very far at all with trying to change the 401k matching period. There are far better options for negotiating a better compensation package. If you are looking for short term hits, which it seems you are since you are looking to shorten the vesting schedule, a sign on bonus might be more in line.
    – Bill Leeper
    Feb 13 '14 at 19:21






  • 1




    Hey @Bill, comments are actually intended to seek clarification or help improve a post, not for answering the questions. Since your comments may be removed, you might consider using them as a basis for a solid answer. Please see What comments are not? for more details. Hope this helps.
    – jmort253♦
    Feb 15 '14 at 3:53












  • 2




    If you are in a senior management position, you should be negotiating over stock not some trivial 3% match vesting. Additionally, negotiating over vesting terms makes it look like you are not in it for the long haul, which is a very bad thing to convey during negotiations.
    – Bill Leeper
    Feb 13 '14 at 18:42











  • Good point, under some circumstances; but not every organization is publicly held. I'm considering all my options for negotiation and it's helpful to know what is likely to be in play vs. what is not.
    – Roger
    Feb 13 '14 at 19:02










  • Even with privately held companies, there are still options for equity. As other have said, you will not get very far at all with trying to change the 401k matching period. There are far better options for negotiating a better compensation package. If you are looking for short term hits, which it seems you are since you are looking to shorten the vesting schedule, a sign on bonus might be more in line.
    – Bill Leeper
    Feb 13 '14 at 19:21






  • 1




    Hey @Bill, comments are actually intended to seek clarification or help improve a post, not for answering the questions. Since your comments may be removed, you might consider using them as a basis for a solid answer. Please see What comments are not? for more details. Hope this helps.
    – jmort253♦
    Feb 15 '14 at 3:53







2




2




If you are in a senior management position, you should be negotiating over stock not some trivial 3% match vesting. Additionally, negotiating over vesting terms makes it look like you are not in it for the long haul, which is a very bad thing to convey during negotiations.
– Bill Leeper
Feb 13 '14 at 18:42





If you are in a senior management position, you should be negotiating over stock not some trivial 3% match vesting. Additionally, negotiating over vesting terms makes it look like you are not in it for the long haul, which is a very bad thing to convey during negotiations.
– Bill Leeper
Feb 13 '14 at 18:42













Good point, under some circumstances; but not every organization is publicly held. I'm considering all my options for negotiation and it's helpful to know what is likely to be in play vs. what is not.
– Roger
Feb 13 '14 at 19:02




Good point, under some circumstances; but not every organization is publicly held. I'm considering all my options for negotiation and it's helpful to know what is likely to be in play vs. what is not.
– Roger
Feb 13 '14 at 19:02












Even with privately held companies, there are still options for equity. As other have said, you will not get very far at all with trying to change the 401k matching period. There are far better options for negotiating a better compensation package. If you are looking for short term hits, which it seems you are since you are looking to shorten the vesting schedule, a sign on bonus might be more in line.
– Bill Leeper
Feb 13 '14 at 19:21




Even with privately held companies, there are still options for equity. As other have said, you will not get very far at all with trying to change the 401k matching period. There are far better options for negotiating a better compensation package. If you are looking for short term hits, which it seems you are since you are looking to shorten the vesting schedule, a sign on bonus might be more in line.
– Bill Leeper
Feb 13 '14 at 19:21




1




1




Hey @Bill, comments are actually intended to seek clarification or help improve a post, not for answering the questions. Since your comments may be removed, you might consider using them as a basis for a solid answer. Please see What comments are not? for more details. Hope this helps.
– jmort253♦
Feb 15 '14 at 3:53




Hey @Bill, comments are actually intended to seek clarification or help improve a post, not for answering the questions. Since your comments may be removed, you might consider using them as a basis for a solid answer. Please see What comments are not? for more details. Hope this helps.
– jmort253♦
Feb 15 '14 at 3:53










4 Answers
4






active

oldest

votes

















up vote
5
down vote



accepted










If it is for a larger company, the vesting period may be a company-wide policy, spelled out in company documentation and handbooks, that they can't change per-employee. I've also found that the bigger and more corporate a company is, the less likely they are to budge on policy even for a top candidate or decision that could benefit the business.



If you're a valuable candidate, I feel like it's easier, from a policy standpoint alone, to give you a larger base, bonus, stock grant, vacation, etc, etc; than to change company-wide 401k policies.






share|improve this answer
















  • 5




    Not only that these are usually managed by a 3rd party investment firm. It may not even be possible to change the vesting schedule for an individual if they have a contract with the company.
    – IDrinkandIKnowThings
    Feb 13 '14 at 17:26











  • Thanks, Miro and Chad. This is exactly what I was looking for.
    – Roger
    Feb 13 '14 at 18:22

















up vote
3
down vote














In American business, can the length of time before eligibility in a
401(k) matching program be negotiated?




Anything can be negotiated.



Vesting/Matching periods are usually handled at a corporate-wide level though, and this sort of thing might be rather hard to pull off for the average candidate.



Certainly senior management can get away with far more than the average drone.



And certainly smaller companies can be much more flexible.



If the company is motivated enough, any exception can be granted.






share|improve this answer
















  • 4




    IANAA, but I believe that due to the federally controlled tax benefits of 401(k) programs, they need to be applied fairly across the set of employees. I believe there are even restrictions on participation by senior management based on general employee participation. Can't find the link I was viewing the other day, will post if I can find it. In the end, this may be one of the few things which isn't negotiable.
    – cdkMoose
    Feb 13 '14 at 17:46










  • For example, irs.gov/Retirement-Plans/…. deals with over participation by senior management.
    – cdkMoose
    Feb 13 '14 at 17:54

















up vote
1
down vote













401k rules are not entirely to the discretion of the company. Most of the fairness rules are there to make sure those on the top part of the salaries don't get preferential treatment. http://www.cpas-401k.com/401k-compliance-testing-rules.html



You being an exception to the vesting period could draw some attention from the IRS and your company wouldn't want the hassle.



Go ahead and ask. If they can't do it, they may just feel a higher starting salary is easier.






share|improve this answer



























    up vote
    -1
    down vote













    I think this is a good question; Others have pointed out that the company likely can't (or wouldn't if it somehow could) change this per employee.



    It's too bad, though - Some vesting periods are god-awful. I was at an organization once that had a 6 year vesting period, and I wouldn't bother contributing to it the entire time I was at the organization, despite their many attempts to get employees to utiilze it.



    A vesting period that's too long can keep employees from being motivated to contribute.



    While you may not be able to convince them to alter the vesting period for you, you could certainly use it as leverage to ask for a higher salary.



    This will benefit you; and more than likely will bring some attention to the issue for them as well. If candidates are regularly disappointed in their benefit plans and are negotiating for other things as a result, it will likely pressure them to improve their plan's benefits, matching, vesting schedules, etc.






    share|improve this answer




















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      4 Answers
      4






      active

      oldest

      votes








      4 Answers
      4






      active

      oldest

      votes









      active

      oldest

      votes






      active

      oldest

      votes








      up vote
      5
      down vote



      accepted










      If it is for a larger company, the vesting period may be a company-wide policy, spelled out in company documentation and handbooks, that they can't change per-employee. I've also found that the bigger and more corporate a company is, the less likely they are to budge on policy even for a top candidate or decision that could benefit the business.



      If you're a valuable candidate, I feel like it's easier, from a policy standpoint alone, to give you a larger base, bonus, stock grant, vacation, etc, etc; than to change company-wide 401k policies.






      share|improve this answer
















      • 5




        Not only that these are usually managed by a 3rd party investment firm. It may not even be possible to change the vesting schedule for an individual if they have a contract with the company.
        – IDrinkandIKnowThings
        Feb 13 '14 at 17:26











      • Thanks, Miro and Chad. This is exactly what I was looking for.
        – Roger
        Feb 13 '14 at 18:22














      up vote
      5
      down vote



      accepted










      If it is for a larger company, the vesting period may be a company-wide policy, spelled out in company documentation and handbooks, that they can't change per-employee. I've also found that the bigger and more corporate a company is, the less likely they are to budge on policy even for a top candidate or decision that could benefit the business.



      If you're a valuable candidate, I feel like it's easier, from a policy standpoint alone, to give you a larger base, bonus, stock grant, vacation, etc, etc; than to change company-wide 401k policies.






      share|improve this answer
















      • 5




        Not only that these are usually managed by a 3rd party investment firm. It may not even be possible to change the vesting schedule for an individual if they have a contract with the company.
        – IDrinkandIKnowThings
        Feb 13 '14 at 17:26











      • Thanks, Miro and Chad. This is exactly what I was looking for.
        – Roger
        Feb 13 '14 at 18:22












      up vote
      5
      down vote



      accepted







      up vote
      5
      down vote



      accepted






      If it is for a larger company, the vesting period may be a company-wide policy, spelled out in company documentation and handbooks, that they can't change per-employee. I've also found that the bigger and more corporate a company is, the less likely they are to budge on policy even for a top candidate or decision that could benefit the business.



      If you're a valuable candidate, I feel like it's easier, from a policy standpoint alone, to give you a larger base, bonus, stock grant, vacation, etc, etc; than to change company-wide 401k policies.






      share|improve this answer












      If it is for a larger company, the vesting period may be a company-wide policy, spelled out in company documentation and handbooks, that they can't change per-employee. I've also found that the bigger and more corporate a company is, the less likely they are to budge on policy even for a top candidate or decision that could benefit the business.



      If you're a valuable candidate, I feel like it's easier, from a policy standpoint alone, to give you a larger base, bonus, stock grant, vacation, etc, etc; than to change company-wide 401k policies.







      share|improve this answer












      share|improve this answer



      share|improve this answer










      answered Feb 13 '14 at 16:50









      Miro

      2,83441626




      2,83441626







      • 5




        Not only that these are usually managed by a 3rd party investment firm. It may not even be possible to change the vesting schedule for an individual if they have a contract with the company.
        – IDrinkandIKnowThings
        Feb 13 '14 at 17:26











      • Thanks, Miro and Chad. This is exactly what I was looking for.
        – Roger
        Feb 13 '14 at 18:22












      • 5




        Not only that these are usually managed by a 3rd party investment firm. It may not even be possible to change the vesting schedule for an individual if they have a contract with the company.
        – IDrinkandIKnowThings
        Feb 13 '14 at 17:26











      • Thanks, Miro and Chad. This is exactly what I was looking for.
        – Roger
        Feb 13 '14 at 18:22







      5




      5




      Not only that these are usually managed by a 3rd party investment firm. It may not even be possible to change the vesting schedule for an individual if they have a contract with the company.
      – IDrinkandIKnowThings
      Feb 13 '14 at 17:26





      Not only that these are usually managed by a 3rd party investment firm. It may not even be possible to change the vesting schedule for an individual if they have a contract with the company.
      – IDrinkandIKnowThings
      Feb 13 '14 at 17:26













      Thanks, Miro and Chad. This is exactly what I was looking for.
      – Roger
      Feb 13 '14 at 18:22




      Thanks, Miro and Chad. This is exactly what I was looking for.
      – Roger
      Feb 13 '14 at 18:22












      up vote
      3
      down vote














      In American business, can the length of time before eligibility in a
      401(k) matching program be negotiated?




      Anything can be negotiated.



      Vesting/Matching periods are usually handled at a corporate-wide level though, and this sort of thing might be rather hard to pull off for the average candidate.



      Certainly senior management can get away with far more than the average drone.



      And certainly smaller companies can be much more flexible.



      If the company is motivated enough, any exception can be granted.






      share|improve this answer
















      • 4




        IANAA, but I believe that due to the federally controlled tax benefits of 401(k) programs, they need to be applied fairly across the set of employees. I believe there are even restrictions on participation by senior management based on general employee participation. Can't find the link I was viewing the other day, will post if I can find it. In the end, this may be one of the few things which isn't negotiable.
        – cdkMoose
        Feb 13 '14 at 17:46










      • For example, irs.gov/Retirement-Plans/…. deals with over participation by senior management.
        – cdkMoose
        Feb 13 '14 at 17:54














      up vote
      3
      down vote














      In American business, can the length of time before eligibility in a
      401(k) matching program be negotiated?




      Anything can be negotiated.



      Vesting/Matching periods are usually handled at a corporate-wide level though, and this sort of thing might be rather hard to pull off for the average candidate.



      Certainly senior management can get away with far more than the average drone.



      And certainly smaller companies can be much more flexible.



      If the company is motivated enough, any exception can be granted.






      share|improve this answer
















      • 4




        IANAA, but I believe that due to the federally controlled tax benefits of 401(k) programs, they need to be applied fairly across the set of employees. I believe there are even restrictions on participation by senior management based on general employee participation. Can't find the link I was viewing the other day, will post if I can find it. In the end, this may be one of the few things which isn't negotiable.
        – cdkMoose
        Feb 13 '14 at 17:46










      • For example, irs.gov/Retirement-Plans/…. deals with over participation by senior management.
        – cdkMoose
        Feb 13 '14 at 17:54












      up vote
      3
      down vote










      up vote
      3
      down vote










      In American business, can the length of time before eligibility in a
      401(k) matching program be negotiated?




      Anything can be negotiated.



      Vesting/Matching periods are usually handled at a corporate-wide level though, and this sort of thing might be rather hard to pull off for the average candidate.



      Certainly senior management can get away with far more than the average drone.



      And certainly smaller companies can be much more flexible.



      If the company is motivated enough, any exception can be granted.






      share|improve this answer













      In American business, can the length of time before eligibility in a
      401(k) matching program be negotiated?




      Anything can be negotiated.



      Vesting/Matching periods are usually handled at a corporate-wide level though, and this sort of thing might be rather hard to pull off for the average candidate.



      Certainly senior management can get away with far more than the average drone.



      And certainly smaller companies can be much more flexible.



      If the company is motivated enough, any exception can be granted.







      share|improve this answer












      share|improve this answer



      share|improve this answer










      answered Feb 13 '14 at 16:48









      Joe Strazzere

      224k107661930




      224k107661930







      • 4




        IANAA, but I believe that due to the federally controlled tax benefits of 401(k) programs, they need to be applied fairly across the set of employees. I believe there are even restrictions on participation by senior management based on general employee participation. Can't find the link I was viewing the other day, will post if I can find it. In the end, this may be one of the few things which isn't negotiable.
        – cdkMoose
        Feb 13 '14 at 17:46










      • For example, irs.gov/Retirement-Plans/…. deals with over participation by senior management.
        – cdkMoose
        Feb 13 '14 at 17:54












      • 4




        IANAA, but I believe that due to the federally controlled tax benefits of 401(k) programs, they need to be applied fairly across the set of employees. I believe there are even restrictions on participation by senior management based on general employee participation. Can't find the link I was viewing the other day, will post if I can find it. In the end, this may be one of the few things which isn't negotiable.
        – cdkMoose
        Feb 13 '14 at 17:46










      • For example, irs.gov/Retirement-Plans/…. deals with over participation by senior management.
        – cdkMoose
        Feb 13 '14 at 17:54







      4




      4




      IANAA, but I believe that due to the federally controlled tax benefits of 401(k) programs, they need to be applied fairly across the set of employees. I believe there are even restrictions on participation by senior management based on general employee participation. Can't find the link I was viewing the other day, will post if I can find it. In the end, this may be one of the few things which isn't negotiable.
      – cdkMoose
      Feb 13 '14 at 17:46




      IANAA, but I believe that due to the federally controlled tax benefits of 401(k) programs, they need to be applied fairly across the set of employees. I believe there are even restrictions on participation by senior management based on general employee participation. Can't find the link I was viewing the other day, will post if I can find it. In the end, this may be one of the few things which isn't negotiable.
      – cdkMoose
      Feb 13 '14 at 17:46












      For example, irs.gov/Retirement-Plans/…. deals with over participation by senior management.
      – cdkMoose
      Feb 13 '14 at 17:54




      For example, irs.gov/Retirement-Plans/…. deals with over participation by senior management.
      – cdkMoose
      Feb 13 '14 at 17:54










      up vote
      1
      down vote













      401k rules are not entirely to the discretion of the company. Most of the fairness rules are there to make sure those on the top part of the salaries don't get preferential treatment. http://www.cpas-401k.com/401k-compliance-testing-rules.html



      You being an exception to the vesting period could draw some attention from the IRS and your company wouldn't want the hassle.



      Go ahead and ask. If they can't do it, they may just feel a higher starting salary is easier.






      share|improve this answer
























        up vote
        1
        down vote













        401k rules are not entirely to the discretion of the company. Most of the fairness rules are there to make sure those on the top part of the salaries don't get preferential treatment. http://www.cpas-401k.com/401k-compliance-testing-rules.html



        You being an exception to the vesting period could draw some attention from the IRS and your company wouldn't want the hassle.



        Go ahead and ask. If they can't do it, they may just feel a higher starting salary is easier.






        share|improve this answer






















          up vote
          1
          down vote










          up vote
          1
          down vote









          401k rules are not entirely to the discretion of the company. Most of the fairness rules are there to make sure those on the top part of the salaries don't get preferential treatment. http://www.cpas-401k.com/401k-compliance-testing-rules.html



          You being an exception to the vesting period could draw some attention from the IRS and your company wouldn't want the hassle.



          Go ahead and ask. If they can't do it, they may just feel a higher starting salary is easier.






          share|improve this answer












          401k rules are not entirely to the discretion of the company. Most of the fairness rules are there to make sure those on the top part of the salaries don't get preferential treatment. http://www.cpas-401k.com/401k-compliance-testing-rules.html



          You being an exception to the vesting period could draw some attention from the IRS and your company wouldn't want the hassle.



          Go ahead and ask. If they can't do it, they may just feel a higher starting salary is easier.







          share|improve this answer












          share|improve this answer



          share|improve this answer










          answered Feb 13 '14 at 17:50







          user8365



























              up vote
              -1
              down vote













              I think this is a good question; Others have pointed out that the company likely can't (or wouldn't if it somehow could) change this per employee.



              It's too bad, though - Some vesting periods are god-awful. I was at an organization once that had a 6 year vesting period, and I wouldn't bother contributing to it the entire time I was at the organization, despite their many attempts to get employees to utiilze it.



              A vesting period that's too long can keep employees from being motivated to contribute.



              While you may not be able to convince them to alter the vesting period for you, you could certainly use it as leverage to ask for a higher salary.



              This will benefit you; and more than likely will bring some attention to the issue for them as well. If candidates are regularly disappointed in their benefit plans and are negotiating for other things as a result, it will likely pressure them to improve their plan's benefits, matching, vesting schedules, etc.






              share|improve this answer
























                up vote
                -1
                down vote













                I think this is a good question; Others have pointed out that the company likely can't (or wouldn't if it somehow could) change this per employee.



                It's too bad, though - Some vesting periods are god-awful. I was at an organization once that had a 6 year vesting period, and I wouldn't bother contributing to it the entire time I was at the organization, despite their many attempts to get employees to utiilze it.



                A vesting period that's too long can keep employees from being motivated to contribute.



                While you may not be able to convince them to alter the vesting period for you, you could certainly use it as leverage to ask for a higher salary.



                This will benefit you; and more than likely will bring some attention to the issue for them as well. If candidates are regularly disappointed in their benefit plans and are negotiating for other things as a result, it will likely pressure them to improve their plan's benefits, matching, vesting schedules, etc.






                share|improve this answer






















                  up vote
                  -1
                  down vote










                  up vote
                  -1
                  down vote









                  I think this is a good question; Others have pointed out that the company likely can't (or wouldn't if it somehow could) change this per employee.



                  It's too bad, though - Some vesting periods are god-awful. I was at an organization once that had a 6 year vesting period, and I wouldn't bother contributing to it the entire time I was at the organization, despite their many attempts to get employees to utiilze it.



                  A vesting period that's too long can keep employees from being motivated to contribute.



                  While you may not be able to convince them to alter the vesting period for you, you could certainly use it as leverage to ask for a higher salary.



                  This will benefit you; and more than likely will bring some attention to the issue for them as well. If candidates are regularly disappointed in their benefit plans and are negotiating for other things as a result, it will likely pressure them to improve their plan's benefits, matching, vesting schedules, etc.






                  share|improve this answer












                  I think this is a good question; Others have pointed out that the company likely can't (or wouldn't if it somehow could) change this per employee.



                  It's too bad, though - Some vesting periods are god-awful. I was at an organization once that had a 6 year vesting period, and I wouldn't bother contributing to it the entire time I was at the organization, despite their many attempts to get employees to utiilze it.



                  A vesting period that's too long can keep employees from being motivated to contribute.



                  While you may not be able to convince them to alter the vesting period for you, you could certainly use it as leverage to ask for a higher salary.



                  This will benefit you; and more than likely will bring some attention to the issue for them as well. If candidates are regularly disappointed in their benefit plans and are negotiating for other things as a result, it will likely pressure them to improve their plan's benefits, matching, vesting schedules, etc.







                  share|improve this answer












                  share|improve this answer



                  share|improve this answer










                  answered Nov 25 '17 at 22:44









                  schizoid04

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