OSPS E-News ~ Important Notice Regarding Payroll Deductions for Savings Bonds

[Announcements]

The US Treasury has made a change regarding the purchase of US Savings
Bonds.  Effective January 1, 2008 they have imposed an annual limit of
$5,000 in bond purchases per Social Security Number.  

 

What This Means

 

If your employee Joe purchases bonds in his name only, he has a $5,000
annual limit.  If Joe purchases the bonds jointly with his wife Rose, he
still has a limit of $5,000 annually.  

 

If Joe purchases some bonds in his name and some in the name of his wife
Rose, each of their SSNs can have a total of $5,000 annually or a total
of $10,000.  Same thing if Joe buys bonds for his grandkids and puts the
bonds in their names and uses their social security numbers.  

 

Also, if Joe and Rose are both participating in a payroll savings plan
for bond purchases from their respective employers, they need to take
the $5000 annual limit into consideration for their combined purchases,
depending upon bond ownership.  

 

What OSPS Will Do

 

We have queried the Savings Bond data base and identified those who are
likely to come up against the $5000 limit by the end of 2008,  presuming
their monthly deductions remain the same.  Please note that there are
only a few who make purchases this large in a single year.  OSPS will
send a listing of these bond purchasers to each agency this week.   If
you don't receive a listing, don't worry.  

 

What Agency Payroll Needs to Do

 

1.	If you receive a listing of one or more employees who need to
modify their bond purchasing plans for 2008 (and after) to remain under
the $5000 limit, you need to contact that employee and assist them in
completing new bond purchase agreements that will keep them under the
$5,000 limit.  

 

2.	After that, each time someone signs up for a payroll deduction
bond purchase, you will need to evaluate whether their deduction request
will exceed the $5,000 limit, advise them accordingly and ensure that
they only sign up for deductions that will fit within the limit.   

 

 

Frequently Asked Questions

 

US Treasury Direct has published a FAQ on their website.  You can review
this information and share it with your employees who are affected by
this change.  

http://www.treasurydirect.gov/indiv/research/faq/annualpurchaselimitchan
geqa.htm

 

 

Another Way You Can Help Your Agency Employees

 

The payroll savings bond program has its limits.  We are only able to
sell Series E bonds and all of the purchases are tied to the payroll
schedule.   There are other bond types available to any purchaser who
registers and does business with the US Treasury Direct website and they
would have the freedom to make investments on a schedule that works for
them.   http://www.treasurydirect.gov/indiv/indiv.htm

 

The next time someone comes to your payroll desk to sign up for payroll
deduction for bonds, you might want to give them this website address.
There are so many more options available to them when doing business
directly with the US Treasury.  They can buy Series E and Series I bonds
and they can escrow their funds to buy a bond just like they do through
payroll deduction.  

 

In addition, the US Treasury Direct site has a number of very useful
tools and resources for bond owners and purchasers.  This website takes
bond purchasing into the 21st Century and gives the bond owner much more
control over the investment.  Just something to consider.  

 

 

 

Sharon McKeehan, Manager

Oregon Statewide Payroll Services

DAS/State Controller's Division

155 Cottage Street NE,  U-50

Salem, OR  97301-3969

(503) 378-6777 ext. 230

Visit our Webpages: http://oregon.gov/DAS/SCD/OSPS

 

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