74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
SA to HB 2285
LC 666/HB 2285-1
SENATE AMENDMENTS TO
HOUSE BILL 2285
By COMMITTEE ON COMMERCE
June 11
On page 1 of the printed bill, line 2, after the second
semicolon delete the rest of the line and insert 'amending ORS
238A.025, 238A.130, 238A.140, 238A.142, 238A.165, 238A.305 and
243.800 and section 46b, chapter 733, Oregon Laws 2003; and
repealing ORS 238.180 and 238A.157 and section 2a, chapter 733,
Oregon Laws 2003.'.
Delete lines 4 through 29 and delete page 2 and insert:
{ +
' BREAK IN SERVICE + }
' { + SECTION 1. + } ORS 238A.025 is amended to read:
' 238A.025. (1) The Oregon Public Service Retirement Plan is
established. The purpose of the Oregon Public Service Retirement
Plan is to provide career public employees with a secure and fair
retirement income at an affordable, stable and predictable cost
to the taxpayers. The Oregon Public Service Retirement Plan is
composed of a pension program and an individual account program.
The pension program and the individual account program are
separate accounts for purposes of federal income tax
qualification, and the assets of each program must be held as
part of the trust established by ORS 238.660 for the exclusive
benefit of the participants and beneficiaries. It is the intent
of the Legislative Assembly that pursuant to section 414(k) of
the Internal Revenue Code the individual account program be
established and maintained as a tax-qualified defined
contribution governmental plan for the purposes of sections 72(d)
and 415 of the Internal Revenue Code. The Public Employees
Retirement Board may create separate accounts within the Public
Employees Retirement Fund for the pension program and the
individual account program.
' (2) Notwithstanding any provision of ORS chapter 238, any
person who is employed by a participating public employer on or
after August 29, 2003, and who has not established membership in
the Public Employees Retirement System before August 29, 2003, is
entitled to receive only the benefits provided under the Oregon
Public Service Retirement Plan for periods of service with
participating public employers on and after August 29, 2003, and
has no right or claim to any benefit under ORS chapter 238 except
as specifically provided by this chapter.
' (3) { - (a) - } Any person who is { - an active - } { +
a + } member of the Public Employees Retirement System on August
28, 2003, is entitled to receive the benefits provided by ORS
chapter 238 for all service performed before, on and after August
29, 2003 { + , unless the person's membership in the system is
subsequently terminated under ORS 238.095 + } { - , unless the
person has a break in service on or after August 29, 2003 - } .
If the { - person has a break in service - } { + person's
membership in the system is terminated under ORS 238.095 + } on
or after August 29, 2003, the person is entitled to receive
{ - the benefits provided by ORS chapter 238 for all creditable
service performed before the break in service, and - } the
benefits provided under the Oregon Public Service Retirement Plan
for periods of service with participating public employers after
the { - break in service - } { + termination of
membership + }.
' { - (b) Except as provided in this subsection, a person has
a break in service for the purposes of this subsection if the
person performs no service with a participating public employer
in a qualifying position for a period of six consecutive
months. - }
' { - (c) If a person leaves employment with a participating
public employer for purposes that would qualify the person for
family leave under ORS 659A.150 to 659A.186, the person has a
break in service for the purposes of this subsection only if the
person performs no service with a participating public employer
in a qualifying position for a period of 12 consecutive months
after leaving employment with the participating public
employer. - }
' { - (d) If a person leaves employment with a participating
public employer for career development purposes pursuant to
written authorization of the participating public employer under
a written policy of the employer that applies generally to the
class of employees to which the member belongs, the person has a
break in service for the purposes of this subsection only if the
person performs no service with a participating public employer
in a qualifying position for a period of 12 consecutive months
after leaving employment with the participating public
employer. - }
' { - (e) A person does not have a break in service for the
purposes of this subsection by reason of any period of time
during which the person leaves employment with a participating
public employer for the purpose of serving as a member of the
Legislative Assembly during a legislative session. - }
' { - (f) A person does not have a break in service for the
purposes of this subsection by reason of any period of time
during which the person is absent from employment with a
participating public employer and receives a disability
retirement allowance under ORS 238.320. - }
' { - (g) A person does not have a break in service for the
purposes of this subsection by reason of any period of time
during which the person leaves employment with a participating
public employer based on the seasonal nature of the person's
employment as long as the person returns to employment with the
public employer before the expiration of 12 full calendar
months. - }
' (4) A person establishes membership in the system before
August 29, 2003, for the purposes of this section if:
' (a) The person is a member of the system, or a judge member
of the system, on August 28, 2003; or
' (b) The person performed any period of service for a
participating public employer before August 29, 2003, that is
credited to the six-month period of employment required of an
employee under ORS 238.015 before an employee may become a member
of the system.
' (5) Except as provided in this chapter, ORS chapter 238 does
not apply to the Oregon Public Service Retirement Plan.
' (6) The provisions of this section do not apply to a person
elected or appointed as a judge as defined in ORS 238.500.
' { + SECTION 2. + } ORS 238A.165 is amended to read:
' 238A.165. (1) Except as provided in this section, earliest
retirement age for a member of the pension program is 55 years of
age.
' (2) Earliest retirement age for a member of the pension
program who retires from service as a police officer or
firefighter is 50 years of age if the member has held a position
as a police officer or firefighter continuously for a period of
not less than five years immediately before the effective date of
retirement. Earliest retirement date for a member described in
this subsection is not later than the date the member reaches 55
years of age.
' { - (3) If a member has a break in service under ORS
238A.025 and is entitled to receive a retirement allowance under
ORS chapter 238 in addition to a pension under this chapter,
earliest retirement age under this chapter is the age attained by
a member when the member could first make application for
retirement under the provisions of ORS 238.280. - }
' { - (4) - } { + (3) + } A member of the pension program
who has reached earliest retirement age may retire on an early
retirement date that is the first day of any month on or after
the member has reached earliest retirement age.
' { + SECTION 3. + } ORS 238A.305 is amended to read:
' 238A.305. (1) Except as provided in subsection (2) of this
section, all members of the Public Employees Retirement System
who established membership in the Public Employees Retirement
System before August 29, 2003, as described in ORS 238A.025
become members of the individual account program on January 1,
2004.
' (2) A member of the Public Employees Retirement System may
not be a member of the individual account program during any
period of time during which the member is required to make
contributions to the system under ORS 238.200.
' (3) Solely for the purpose of determining the amount of the
employee contribution for persons who become members of the
individual account program under this section, whether paid by
the employee or by the employer, the Public Employees Retirement
Board shall use the definition of 'salary' provided by ORS
238.005. { - If a person who is subject to this subsection has
a break in service as described in ORS 238A.025, the board shall
use the definition of 'salary' provided by ORS 238A.005 for the
purpose of determining the amount of the employee contribution to
the individual account program for all service by the member
after the break in service. - }
' { + SECTION 4. + } Section 46b, chapter 733, Oregon Laws
2003, is amended to read:
' { + Sec. 46b. + } (1) Except as provided in subsection (2)
of this section, { - section 46a of this 2003 Act - } { + ORS
237.650 + } applies to all members of the Legislative Assembly
who take office on or after
{ - the effective date of this 2003 Act - } { + August 29,
2003 + }.
' (2) In addition to the options provided by { - section 46a
of this 2003 Act - } { + ORS 237.650 + }, any person who is a
member of the Legislative Assembly on { - the effective date of
this 2003 Act - } { + August 29, 2003, + } and who is a member
of the Public Employees Retirement System on { - the effective
date of this 2003 Act - } { + August 29, 2003, + } may elect to
remain a member of the system under ORS chapter 238 for so long
as the member remains in continuous service as a member of the
Legislative Assembly. An election under this subsection must be
made in the manner provided by { - section 46a (2) of this 2003
Act - } { + ORS 237.650 (2) + }.
' (3) A member of the Legislative Assembly remains in
continuous service as a member of the Legislative Assembly for
the purposes of subsection (2) of this section { - for so long
as the member continues in office without a break in service as
described in sections 2 and 2a of this 2003 Act - } { + until
the person resigns or otherwise leaves office + }.
' { + SECTION 5. + } ORS 243.800 is amended to read:
' 243.800. (1) Notwithstanding any provision of ORS chapter 238
or 238A or ORS 243.910 to 243.945, the State Board of Higher
Education shall establish and administer an Optional Retirement
Plan for administrative and academic employees of the Oregon
University System who are eligible for membership in the Public
Employees Retirement System. The Optional Retirement Plan must be
a qualified plan under the Internal Revenue Code, capable of
accepting funds transferred under subsection (7) of this section
without the transfer being treated as a taxable event under the
Internal Revenue Code, and willing to accept those funds.
Retirement and death benefits shall be provided under the plan by
the purchase of annuity contracts, fixed or variable or a
combination thereof, or by contracts for investments in mutual
funds.
' (2) The State Board of Higher Education shall select at least
two life insurance companies providing fixed and variable
annuities and at least two investment companies providing mutual
funds, but not more than five companies in total, for the purpose
of providing benefits under the Optional Retirement Plan. The
State Board of Higher Education shall establish selection
criteria for the purpose of this subsection.
' (3) An administrative or academic employee may make an
irrevocable election to participate in the Optional Retirement
Plan within six months after being employed. An election under
this subsection is effective on the first day of the month
following six full months of employment.
' (4) An administrative or academic employee who does not elect
to participate in the Optional Retirement Plan:
' (a) Remains or becomes a member of the Public Employees
Retirement System in accordance with ORS chapters 238 and 238A;
or
' (b) Continues to be assisted by the State Board of Higher
Education under ORS 243.920 if the employee is being so assisted.
' (5) Except as provided in subsection (6) of this section,
employees who elect to participate in the Optional Retirement
Plan are ineligible for active membership in the Public Employees
Retirement System or for any assistance by the State Board of
Higher Education under ORS 243.920 as long as those employees are
employed in the Oregon University System and the plan is in
effect.
' (6)(a) An administrative or academic employee who elects to
participate in the Optional Retirement Plan, who has creditable
service under ORS chapter 238 as defined by ORS 238.005 and who
is not vested shall be considered by the Public Employees
Retirement Board to be a terminated member under the provisions
of ORS 238.095 as of the effective date of the election, and the
amount credited to the member account of the member shall be
transferred directly to the Optional Retirement Plan by the
Public Employees Retirement Board in the manner provided by
subsection (7) of this section.
' (b) An administrative or academic employee who elects to
participate in the Optional Retirement Plan, who has creditable
service under ORS chapter 238 as defined by ORS 238.005 and who
is vested shall be considered to be an inactive member by the
Public Employees Retirement Board and shall retain all the
rights, privileges and options under ORS chapter 238 unless the
employee makes a written request to the Public Employees
Retirement Board for a transfer of the amounts credited to the
member account of the member to the Optional Retirement Plan. A
request for a transfer must be made at the time the member elects
to participate in the Optional Retirement Plan. Upon receiving
the request, the Public Employees Retirement Board shall transfer
all amounts credited to the member account of the member directly
to the Optional Retirement Plan, and shall terminate all rights,
privileges and options of the employee under ORS chapter 238.
' (c) An administrative or academic employee who elects to
participate in the Optional Retirement Plan, and who is not a
vested member of the pension program of the Oregon Public Service
Retirement Plan as described in ORS 238A.115 on the date that the
election becomes effective, shall be considered to be a
terminated member of the pension program by the Public Employees
Retirement Board as of the effective date of the election.
' (d) An administrative or academic employee who elects to
participate in the Optional Retirement Plan, and who is a vested
member of the pension program of the Oregon Public Service
Retirement Plan as described in ORS 238A.115 on the date that the
election becomes effective, shall be considered an inactive
member of the pension program by the Public Employees Retirement
Board as of the effective date of the election. An employee who
is subject to the provisions of this paragraph retains all the
rights, privileges and options of an inactive member of the
pension program. If the actuarial equivalent of the employee's
benefit under the pension program at the time that the election
becomes effective is $5,000 or less, the employee may make a
written request to the Public Employees Retirement Board for a
transfer of the employee's interest under the pension program to
the Optional Retirement Plan. The request must be made at the
time the member elects to participate in the Optional Retirement
Plan. Upon receiving the request, the Public Employees Retirement
Board shall transfer the amount determined to be the actuarial
equivalent of the employee's benefit under the pension program
directly to the Optional Retirement Plan, and shall terminate the
membership of the employee in the pension program.
' (e) An administrative or academic employee who elects to
participate in the Optional Retirement Plan, and who is a vested
member of the individual account program of the Oregon Public
Service Retirement Plan as described in ORS 238A.320 on the date
that the election becomes effective, shall be considered an
inactive member of the individual account program by the Public
Employees Retirement Board as of the effective date of the
election. An employee who is subject to the provisions of this
paragraph retains all the rights, privileges and options of an
inactive member of the individual account program. An
administrative or academic employee who elects to participate in
the Optional Retirement Plan, and who is a member of the
individual account program of the Oregon Public Service
Retirement Plan, may make a written request to the Public
Employees Retirement Board that all amounts in the member's
employee account, rollover account and employer account, to the
extent the member is vested in those accounts under ORS 238A.320,
be transferred to the Optional Retirement Plan. The request must
be made at the time the member elects to participate in the
Optional Retirement Plan. Upon receiving the request, the Public
Employees Retirement Board shall transfer the amounts directly to
the Optional Retirement Plan, and shall terminate the membership
of the employee in the individual account program upon making the
transfer.
' (f) Notwithstanding paragraphs (b), (d) and (e) of this
subsection, the Public Employees Retirement Board shall not treat
any employee as an inactive member under the provisions of this
subsection for the purpose of receiving any benefit under ORS
chapter 238 or 238A that requires that the employee be separated
from all service with participating public employers and with
employers who are treated as part of a participating public
employer's controlled group under the federal laws and rules
governing the status of the system and the Public Employees
Retirement Fund as a qualified governmental retirement plan and
trust.
' (7) Any amounts transferred from the Public Employees
Retirement Fund under subsection (6) of this section shall be
transferred directly to the Optional Retirement Plan by the
Public Employees Retirement Board and shall not be made available
to the employee.
' (8) An employee participating in the Optional Retirement Plan
shall contribute monthly an amount equal to the percentage of the
employee's salary that the employee would otherwise have
contributed as an employee contribution to the Public Employees
Retirement System if the employee had not elected to participate
in the Optional Retirement Plan.
' (9) The State Board of Higher Education shall contribute
monthly to the Optional Retirement Plan the percentage of salary
of each employee participating in the plan equal to the
percentage of salary that would otherwise have been contributed
as an employer contribution on behalf of the employee to the
Public Employees Retirement System, before any offset under ORS
{ - 238.225 (9) - } { + 238.229 (2) + }, if the employee had
not elected to participate in the Optional Retirement Plan.
' (10) Both employee and employer contributions to an Optional
Retirement Plan shall be remitted directly to the companies that
have issued annuity contracts to the participating employees or
directly to the mutual funds.
' (11) Benefits under the Optional Retirement Plan are payable
to employees who elect to participate in the plan and their
beneficiaries by the selected annuity provider or mutual fund in
accordance with the terms of the annuity contracts or the terms
of the contract with the mutual fund. Employees electing to
participate in the plan agree that benefits payable under the
plan are not obligations of the State of Oregon or of the Public
Employees Retirement System.
' { - (12) The percentage of salary contributed by the State
Board of Higher Education under subsection (9) of this section on
behalf of an employee is not affected by reason of the employee
having a break in service, as described by ORS 238A.025. - }
' { + SECTION 6. + } { + (1) The amendments to ORS 238A.025,
238A.165, 238A.305 and 243.800 and section 46b, chapter 733,
Oregon Laws 2003, by sections 1, 2, 3, 4 and 5 of this 2007 Act,
and the repeal of ORS 238.180 and 238A.157 and section 2a,
chapter 733, Oregon Laws 2003, by section 7 of this 2007 Act,
apply to all service by members of the Public Employees
Retirement System, whether performed before, on or after August
29, 2003.
' (2) As soon as possible after the effective date of this 2007
Act, the Public Employees Retirement Board shall recalculate the
benefits of any person who retired before the effective date of
this 2007 Act if the benefits of the person were affected by the
application of ORS 238A.025, as in effect immediately before the
effective date of this 2007 Act.
' (3) As soon as possible after the effective date of this 2007
Act, the Public Employees Retirement Board shall adjust the
service credit of any active or inactive member who was affected
by the application of ORS 238A.025, as in effect immediately
before the effective date of this 2007 Act.
' (4) As soon as possible after the effective date of this 2007
Act, the Public Employees Retirement Board shall adjust
contributions and account balances of the individual accounts
described in ORS 238A.350 for any active or inactive member who
was affected by the application of ORS 238A.025, as in effect
immediately before the effective date of this 2007 Act. The board
may refund contributions, or require additional contributions,
for adjustments to account balances made under this
subsection. + }
' { + SECTION 7. + } { + ORS 238.180 and 238A.157 and
section 2a, chapter 733, Oregon Laws 2003, as amended by section
8, chapter 332, Oregon Laws 2005, are repealed. + }
'
{ + ACCRUAL OF CREDIT UNDER + }
{ +
OREGON PUBLIC SERVICE + }
{ +
RETIREMENT PLAN + }
' { + SECTION 8. + } ORS 238A.140 is amended to read:
' 238A.140. { - (1) A pension program member shall accrue no
retirement credit for any calendar year in which the member has
fewer than 600 hours of service. A member may not accrue more
than one full year of retirement credit in any calendar year. - }
' { + (1) An active member of the pension program accrues one
year of retirement credit for each complete year of service and
one-twelfth of a year of retirement credit for each full month
and each major fraction of a month of service.
' (2) An active member who is a school employee shall be
credited with at least six months of retirement credit if the
member performs service for a major fraction of each month of a
school year that falls between January 1 and June 30, and at
least six months of retirement credit if the member performs
service for a major fraction of each month of a school year that
falls between July 1 and December 31. + }
' { - (2) - } { + (3) + } When an eligible employee becomes
a member under ORS 238A.100, the board shall credit the eligible
employee with retirement credit for the period of employment
required of the employee under ORS 238A.100.
' { + (4) A member may not accrue more than one full year of
retirement credit in any calendar year. + }
' { - (3) Except as provided in this section, a pension
program member shall accrue one full year of retirement credit
for each calendar year in which the member has 2,000 hours of
service or more. - }
' { - (4) Except as provided in this section, a pension
program member shall accrue a prorated year of retirement credit
for each calendar year in which the member has 600 hours of
service or more but fewer than 2,000 hours of service. The
prorated retirement credit shall be calculated by dividing the
number of hours of service by 2,000. - }
' { - (5) If an active member of the pension program works as
a school employee for one or more participating public employers
during a calendar year, and the number of hours of service
required for a full-time school employee employed by the
participating public employer or employers is less than 2,000,
the member accrues retirement credit for the calendar year as
follows: - }
' { - (a) The member accrues one full year of retirement
credit for the calendar year if the member's hours of service as
a school employee are equal to or greater than the number of
hours of service required of a full-time school employee employed
in the same position or a comparable position by the
participating public employer or employers during the calendar
year. - }
' { - (b) The member accrues a prorated year of retirement
credit for each calendar year in which the member has at least
600 hours of service but less than the number of hours of service
required of a full-time school employee employed in the same
position or a comparable position by the participating public
employer or employers during the calendar year. The prorated
retirement credit shall be calculated by dividing the number of
the member's hours of service as a school employee by the number
of hours of service required of a full-time school employee in
the same position or a comparable position. - }
' { - (c) The Public Employees Retirement Board shall adopt
rules governing the accrual of retirement credit on a prorated
basis by an active member who works in both a school employee
position and another qualifying position during the same calendar
year, or who works as a school employee for more than one
participating public employer during the same calendar year. - }
' { - (6) An active member of the pension program who works as
an academic employee of a community college during a calendar
year: - }
' { - (a) Accrues one full year of retirement credit for the
calendar year if the member is employed 1.0 full-time equivalent
on a nine-month or 12-month basis. - }
' { - (b) Accrues a prorated year of retirement credit for
each calendar year in which the member performs the services of
less than 1.0 full-time equivalent. The member is entitled to
prorated retirement credit under this paragraph in an amount
determined by dividing by 1,200 the number of hours calculated to
be the equivalent of the percentage in excess of 0.375 full-time
equivalent for a member employed on a 12-month basis, or in
excess of 0.50 full-time equivalent for a member employed on a
nine-month basis. - }
' { - (7) - } { + (5) + } For purposes of this section,
'school employee ' means:
' (a) A person who is employed by a common school district, a
union high school district or an education service district;
' (b) An employee of the State Board of Higher Education or the
Oregon Health and Science University who is engaged in teaching
or other school activity at an institution of higher education;
' (c) An employee of the Department of Human Services, the
Oregon Youth Authority, the Department of Corrections or the
State Board of Education who is engaged in teaching or other
school activity at an institution supervised by the authority,
board or department; and
' (d) An employee of a community college district other than an
academic employee.
' { + SECTION 9. + } ORS 238A.130 is amended to read:
' 238A.130. (1) Except as provided in subsection (3) of this
section, for purposes of the computation of pension program
benefits under ORS 238A.125, 'final average salary' means
whichever of the following is greater:
' (a) The average salary per calendar year paid to an active
member in the three consecutive calendar years of membership that
produce the highest average salary, including calendar years in
which the member was employed for less than a full calendar year.
If the number of consecutive calendar years of active membership
before the effective date of retirement of the member is three or
less, the final average salary for the member is the average
salary per calendar year paid to the member in all of those
years, without regard to whether the member was employed for full
calendar years.
' (b) One-third of the total salary paid to an active member in
the last 36 calendar months of membership before the effective
date of retirement of the member.
' (2) For the purposes of calculating the final average salary
of a member under subsection (1) of this section, the Public
Employees Retirement Board shall:
' (a) Include any salary paid in or for the calendar month of
separation from employment;
' (b) Exclude any salary for any pay period before the first
full pay period that is included in the three consecutive
calendar years of membership under subsection (1)(a) of this
section; and
' (c) Exclude any salary for any pay period before the first
full pay period that is included in the last 36 calendar months
of membership under subsection (1)(b) of this section.
' (3) For purposes of the computation of pension program
benefits under ORS 238A.125 of a person employed by a local
government as defined in ORS 174.116, 'final average salary'
means whichever of the following is greater:
' (a) The average salary per calendar year earned by an active
member in the three consecutive calendar years of membership that
produce the highest average salary, including calendar years in
which the member was employed for less than a full calendar year.
If the number of consecutive calendar years of active membership
before the effective date of retirement of the member is three or
less, the final average salary for the member is the average
salary per calendar year earned by the member in all of those
years, without regard to whether the member was employed for full
calendar years.
' (b) One-third of the total salary earned by an active member
in the last 36 calendar months of membership before the effective
date of retirement of the member.
' { - (4) For purposes of calculating the final average salary
for a member during any period in which the member worked in a
qualifying position that requires fewer than 2,000 hours of
service in a calendar year, the salary of the member for that
period is the salary that would have been paid if the member had
worked in the same position on a full-time basis. - }
' { - (5) - } { + (4) + } For the purposes of calculating
the final average salary of a member under this section, the
salary of the member does not include any amounts attributable to
hours of overtime that exceed the average number of hours of
overtime for the same class of employees as established by rule
of the Public Employees Retirement Board. The Oregon Department
of Administrative Services shall establish by rule more than one
overtime average for a class of state employees based on the
geographic placement of the employees.
' { + SECTION 10. + } ORS 238A.142 is amended to read:
' 238A.142. (1) { - Subject to ORS 238A.140 (6), - } An
academic employee of a community college who during a calendar
year is employed 0.375 full-time equivalent on a 12-month basis,
or is employed 0.50 full-time equivalent on a nine-month basis,
is considered to have performed 600 hours of service in the
calendar year for all purposes under this chapter.
' { - (2) Subject to ORS 238A.140 (6), an academic employee of
a community college who during a calendar year is employed 1.0
full-time equivalent on a nine-month or 12-month basis is
considered to have performed 1,200 hours of service in the
calendar year for all purposes under this chapter. - }
' { - (3) - } { + (2) + } The governing body of a community
college shall determine the duties of an academic employee of the
community college that constitute a full-time equivalent in any
discipline or academic activity for the purposes of this section.
' { + SECTION 11. + } { + The amendments to ORS 238A.130,
238A.140 and 238A.142 by sections 8, 9 and 10 of this 2007 Act
apply to all service by members of the Public Employees
Retirement System, whether performed before, on or after the
effective date of this 2007 Act. + }
'
{ + MISCELLANEOUS + }
' { + SECTION 12. + } { + The unit captions used in this
2007 Act are provided only for the convenience of the reader and
do not become part of the statutory law of this state or express
any legislative intent in the enactment of this 2007 Act. + } ' .
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