Purpose

To advise agencies of a new option to mail direct deposit advice statements directly to the employee.

Affected Employees

Employees enrolled in Direct Deposit whose agency participates in the new direct mail distribution option

Effective Date(s)

Immediately

Background

At the request of many agencies, OSC is offering an option to mail employee direct deposit advice statements directly to the employees.

Because of the potential cost of this program, the changes in business processes required, and the large number of employees impacted, it is essential that agencies understand all of the requirements to determine if participation is appropriate. Several conditions must be met before OSC can begin allowing participation and they are discussed below.

Program Details

Program Participation

Participation in the program is at the agency level and requires all employees of the agency to receive his or her advice statement through the mail.

Maintaining Up-to-Date and Accurate Addresses

Due to the significant staff time required to process large volumes of mail, OSC can only offer this option if the most efficient mail processing methods are used.  For the direct mail program, OSC will use software, approved by the United States Postal Service (USPS), that allows for swift handling of mail as well as a discounted postal rate.

The process sorts mail by zip code and applies a bar-code address when the narrative address is in the format required by the USPS.  This allows for quicker handling at OSC and the USPS, thus enabling OSC to obtain a favorable rate.

Move Update Certification

In order for agencies to participate in the Direct Mail Program, a significant portion of their mail must be Move Update certified and be able to be automatically bar-coded. (See Payroll Bulletin 1016 for more information about Move Update certification.)

OSC Actions: OSC will continue to participate in the move update service with the USPS and continue to provide the Control-D report NPAY590 – Address Move Update Report. OSC will also continue to provide the Control-D report NPAY766 - Employee Address Not Bar-codeable Report, providing information on the addresses that do not meet the bar-code format. (Please note, improvements are underway for the NPAY766 report).

Agency Actions: Agencies should review the Control–D report NPAY-590 – Address Move Update Report as outlined in Payroll Bulletin 1016. Agencies should also review the Control-D report NPAY766 to determine if addresses have been automatically bar-coded and continue to follow guidelines provided by the USPS to ensure employee addresses can be bar-coded. These guidelines can be found at www.usps.com and in the attached Guidelines for Writing Barcodeable Addresses.

NOTE: The NPAY590 and NPAY766 Control-D reports are generated for all agencies regardless of participation in the direct mail of advice statements.

Notifying Employees

Agencies are required to provide employees with advance notice of their participation in the direct mailing program. Failure to provide this notice prior to the direct mailing of the direct deposit advice may result in a cancellation of the agency’s participation in the program.

Agency Actions - Agencies must inform employees that the agency will begin mailing direct deposit advices to their homes.  Employees should be informed that the address that currently appears on their direct deposit advice statement is the address where the statement will be mailed.  Agencies should anticipate that some employees will request changes or report errors.  As such, agencies should allow sufficient time to correct the records in PayServ before the mailing begins.

OSC Actions – OSC may require confirmation from the agency that employees have been notified that their direct deposit advices will be mailed.

Enrolling in the Direct Mail Distribution Option

Agency Actions - Agencies must complete the Direct Deposit Advice Direct Mail Authorization Form.  This form must include a contact person for PayServ related issues as well as a contact person for funding related issues. The form should be emailed to the Payroll Deduction mailbox.

OSC Actions – OSC will review the authorization form and determine if the employee addresses are sufficiently up-to-date and in a bar-codeable format.  OSC will work with the agency to set a tentative start date. OSC will notify the agency of the dollar amount of the advance payment for postage.  Upon receiving the payment, OSC will begin mailing advices as scheduled.

Cost of Mail

The cost of the mail will depend on meeting standards required of the USPS. The USPS provides a favorable rate if the address has been Move Update certified and can be automatically bar-coded. The current first class rate will be applied for most other mail within the United States. Higher rates apply for mail with foreign addresses or invalid addresses.

A new Control-D report, DDP003CB Postal Service Charges For Advice Statement Mailing.  The report will display the postal rate type, the rate, the number of pieces and the cost. The postal rate types are below.

Bar-Coded Mail – This postal rate type applies to mail that is Move Update certified and can be automatically bar-coded. To optimize the rate applied to bar-coded mail, it is sorted and bundled by zip code. The rate applied to bar-coded mail is a blended rate depending on the volume of mail in each bundle. The rate will be $0.36 in most cases but can be slightly lower or higher.

Presorted First Class – This postal rate type includes mail that is Move Update certified, but cannot be bar-coded because of an inconsistency within the address.   The rate for this mail is the current first class mail rate of $0.44.

Direct Mail First Class – This postal rate type includes mail that is not Move Update certified. Mail that is not Move Update certified is not eligible for the discount rate and is mailed at the current first class rate of $0.44.

Canada/Mexico Mail – Mail addressed to either Canada or Mexico will be included in this postal rate type. The current rate for this category is $0.78.

Unverified Mail – This category includes any mail to a foreign address (other than Mexico or Canada) or mail that is missing a critical component such as zip code. The current rate for this category is $0.98.

Quarterly Advance Billing

Agencies will be billed in advance and are required to maintain a cash balance with OSC.

Payments will be due on the following schedule:

• December 1 for pay periods 20 thru 26 (or 27).
• March 1 for pay periods 1 thru 6.
• June 1 for pay periods 7 thru 13.
• September 1 for pay periods 14 thru 19.

The initial payment must cover the next whole quarter and any pay periods between the start of the direct mailing and that quarter.  Payments will be based on the estimated cost of postage plus 10%.  The following formula will be used to determine the initial payment required.

• Total Number of Advice Statements (per the most recent Control-D report PAY700 Check and Advice Summary) multiplied by 37¢ equals Estimated Postage Cost Per Pay Period.
• Estimated Postage Cost Per Pay Period multiplied by the number of pay periods to be covered equals Estimated Postage Cost Per Quarter.
• Estimated Postage Cost Per Quarter multiplied by .10 equals 10% Estimated Fluctuation Cost.
• 10% Estimated Fluctuation Amount added to Estimated Postage Cost Per Quarter equals Initial Quarterly Payment Amount.

Future quarterly payments will be determined by the prior quarter actual cost, on the DDP003CB report plus 10%, adjusted for any significant balance remaining.

Agency Actions - Agencies must provide the initial payment two pay periods prior to the start of the program. Ongoing quarterly payments are due according to the schedule above. Payments are to be made via Journal Voucher. Agencies who fail to provide subsequent advance funding will be removed from the Direct Deposit Direct Mail program.

OSC Actions - The Bureau of State Payroll Services will determine the amount required for the initial payment using the formula above and ongoing payments based on cost plus 10%. Future quarterly bills will be sent by e-mail. Payment must be received within two weeks to remain in the Direct Mail Program.

Questions

Questions regarding this bulletin may be directed to the Payroll Deduction mailbox.