retirement

Sometimes Uncle Sam can actually get it right

March 19, 2014: 5:00 AM ET

Not one, but two parts of the federal government have come up with good ideas. Will wonders never cease?

myra-savings

FORTUNE -- Sit down, take a deep breath, and prepare to be surprised. Ready? Okay. I'm going to say something nice about the federal government. Two separate parts of it, in fact, each of which has come up with a simple, smart, and imaginative idea.

Would you believe they're the Treasury and the U.S. Postal Service? You should, because it's true.

The Treasury's idea, which allowed President Obama to create Roth retirement accounts that workers will be able to open with only $25, affects more people, so we'll deal with it first. How can Obama establish these accounts on his own? Because the Treasury invented a new kind of U.S. savings bond.

This bond, which will be issued late this year, will carry the same rate as the G Fund in the federal employee Thrift Savings Plan. The G Fund is the equivalent of a money-market fund, but its yield, adjusted monthly, is based on the Treasury's average borrowing cost, rather than on short-term rates, as money funds are. Hence, the G Fund's March yield is 2.25%, about 200 times as high as today's typical Treasury money fund.

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I'm a big fan of offering small savers retirement accounts that won't eat them alive with fees. And who knows? When details of this fee-free plan emerge later this year, with luck kids who have paying jobs will be able to open one of these accounts at work -- a good life lesson. The only thing I don't like is the plan's too-cutesy name, myRA. Which rhymes with Ira, as in IRA. Then again, what do I know from marketing?

You'll never get rich off these accounts, but at least you don't have to worry about them losing value, as you do about bond or stock investments. That's because they're federally guaranteed money-market funds.

These small accounts are of little or no interest to brokerage or fund companies. They max out at $15,000, and as Roth IRAs, they aren't available to high-income types who would love to earn 2.25% in a tax-deferred money-fund account. Smart security, smart limitations on it.

I can't offer kudos to the creator of the G Fund savings bond because the Treasury wouldn't tell me who it is. But I can tell you who came up with the Postal Service's idea: Postmaster General Patrick Donahoe. His idea, available at post offices all over the country, is a play on the most famous misprint in U.S. philatelic history: the Inverted Jenny. That 24¢ issue, released in 1918, celebrated the nation's first airmail flight and carried the picture of a Curtiss JN-4H biplane. (Why the post office wanted to celebrate this particular event isn't clear: The pilot got lost, flew in the wrong direction, and crashed.) Some of the stamps were printed with the plane upside down, hence the name Inverted Jenny. One misprinted 100-stamp sheet escaped into the world, where it made its way to a Wall Street family that came up with the brilliant idea of separating it into pieces, which turned out to be worth more than the sheet was. Like today's practice of carving bonds into tranches. Very clever.

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To stir up interest in stamp collecting -- and to make a few bucks -- the Postal Service in September began selling 2.2 million six-stamp sheets of $2 Jennys flying upside down. Then in a bit of playfulness, the post office also misprinted the misprint, issuing only 100 sheets of right-side-up Jennys. So what had been the ordinary stamp in 1918 is now the rare one. The Postal Service won't say how many Jennys have been sold. Regardless, they're a small windfall for the Postal Service, free publicity in the stamp world -- and fun.

One more thing. The stamp was dedicated at the William H. Gross Gallery at the Postal Museum in Washington, D.C. Yes, that's Pimco's Bill Gross, a.k.a. the king of bonds, whose realm is having some problems these days but whose regal status in the world of stamp collecting is unchallenged.

Bill Gross trading pieces of paper with glue (or today, self-stick adhesive) on them in addition to trading bonds amuses me. And I just love the two ideas. Positive columns aren't my normal stock in trade, but they have their moments. This is one of them.

This story is from the April 7, 2014 issue of Fortune

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