How will COVID-19 affect teacher pensions? The best way to answer that question is to answer it for specific groups:
Retirees will be mostly unaffected. There may be some states that pause or reconsider their policies around cost-of-living adjustments, but for the most part current retirees can rest assured that their pension checks will continue as before.
Teachers about to retire should also be unaffected. Teachers in this group should double check with their plan, but as long as they remain employed and continue their pension contributions, the current school year should count toward their "years of service" toward their benefits. If that is the case, teachers can continue to make plans just as before, knowing that the pension they were promised will still be intact.
Pension plan administrators will likely remind state politicians and the general public that public-sector pension plans are meant to be long-term investors providing patient capital to the markets. They will prefer to sit tight and weather the storm.
State governors and legislators will be handed a large bill from their pension plan administrators. We don't know yet exactly how large this bill might be, but one estimate last week predicted that pension plans were on pace to lose $1 trillion this year. That money will have to be made up somehow.
School district leaders should be prepared for sharing a portion of the pension bill. Depending on the state, that may come through lower state education spending, higher employer contribution rates, or a combination of both.
Current teachers are typically protected from any changes to their benefits, but they could see a rise in their own contribution rates. This will feel like a cut in take-home pay, and it means they'll be contributing more for the same retirement benefit. On top of that, teachers may also see their district freezing salary schedules, imposing hiring freezes, or cutting other services.
Future teachers will be hit the hardest. They will face the full brunt of any pension contribution rate increases. Plus, if states need to reduce their benefit costs, they often apply any changes only to future employees. That helps protect current workers and retirees, but it means the cuts on new workers must be even larger to achieve the same level of savings.