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The Virginia Retirement System evolved from two previous retirement systems. In 1908, the earliest public retirement system in Virginia, the Retired Teacher's Fund, provided benefits for public school teachers only. That system was replaced July 1, 1942, by an act of the General Assembly, which added school administrators and most state employees to the coverage, forming the Virginia Retirement System.

When it became possible for public employees to join social security, Virginia was the first to enter into a federal-state agreement, repealing the existing retirement system, and on February 16, 1952, state employees were brought under social security. The retirement system was replaced with the Virginia Supplemental Retirement System, effective March 1, 1952, reflecting the notion that the pensions were a supplement to basic social security coverage.

The Tax Reform Act of 1986 mandated that public retirement systems could no longer coordinate with social security, recognizing that, in today's economy, retirees need both social security and their pension plans. As a result of this change in focus, a name change effective July 1, 1990, back to Virginia Retirement System, reflects the fact that the system no longer supplements social security, and that its focus now includes preretirement planning, and expanded efforts to communicate with its members.

The Director of the Virginia Retirement System (VRS) is appointed by the Governor and serves at his pleasure. He reports to the Secretary of Administration. VRS is mandated by section 51-111.11 of the Code of Virginia, with the mission of administering the Virginia Retirement System, the State Police Officer's Retirement System, the Judicial Retirement System, and the group-life insurance program for state employees. Overseeing the organization is a seven member Board of Trustees appointed by the Governor, with the director of the System named the chief administrative officer of the Board, but not a member of the Board.

The Governor also appoints members of the Retirement System Review Board, which is made up of persons with expertise in pensions, investments, actuarial science, and pension law. This Board reviews and evaluates proposed changes in the retirement systems administered by the Board of Trustees. The Review Board determines the actuarial impact and legal sufficiency of any changes and submits the findings to the General Assembly. The Virginia Retirement System provides group life insurance and monthly retirement benefits for all vested full-time salaried employees. Participation in these programs is mandatory, and the cost of both programs is paid by the state. VRS publishes "Memo to Members" quarterly, to provide information on legislative changes to the program, and educational opportunities in preretirement planning.