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Do note that, in a letter mailmerge, each record is separated by a Section break, which results in the page numbering being reset to 1 for each record - the page #s don't increment in the same way they would in an ordinary document. If each record is only ever a single page, you could replace the {PAGE} field in the field code with a {SECTION} field. Alternatively, you should be able to configure the printer to insert a sheet feed between Sections (you may need to combine this with configuring the mailmerge main document to use a 'different first page' layout).

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Cheers,
Paul Edstein
[Fmr MS MVP - Word]