• The 1997 Nobel Prize winner emphasized the need for jobs that promote higher retirement savings to maintain living standards
• In 2016, the Instituto Politécnico Nacional (IPN) awarded him an Honorary Doctorate for his contributions to finance and risk management
Given the global challenges in retirement systems, it is crucial to develop mechanisms that ensure workers' pensions through higher savings, while protecting them from economic factors such as inflation, stated Dr. Robert C. Merton, recipient of the 1997 Nobel Prize in Economics.
During his keynote lecture, “New Challenges for the Mexican Pension System,” at the IPN, he explained that all nations face significant challenges, but also opportunities, in retirement system design.
He stressed that the goal of pension systems is to provide sustainable income that is not eroded by inflation, ensuring continuous financial security while maintaining quality of life.
Speaking before the IPN community at the Alejo Peralta Auditorium in Centro Cultural Jaime Torres Bodet, Dr. Merton discussed his U.S.-based proposal for Retirement Security Bonds (RSBs). This framework involves a structured payment system with a fixed interest rate, allowing workers to receive steady income throughout their retirement.
"There is no magic formula for designing a retirement system," he noted, adding that Retirement Security Bonds serve as a guideline, but each country must develop its own tailored pension strategy.
The Nobel laureate highlighted the urgency of financial innovations in retirement planning, stressing the importance of long-term pension system stability and clear, accessible information on retirement age and mechanisms for workers. Originally from New York, Dr. Merton was awarded the Nobel Prize in Economics in 1997, alongside Myron Scholes, for developing a groundbreaking method to calculate the pricing of financial derivatives and risk management. He currently serves as a Finance Professor at the MIT Sloan School of Management.
His keynote lecture was part of the 73rd anniversary celebrations of the Escuela Superior de Economía (ESE) and the 40th anniversary of its Doctorate in Economic Sciences program.
For more information, visit www.ipn.mx
INSTITUTO POLITÉCNICO NACIONAL
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