Merrill Lynch Adviser Pay Plan Isn’t ERISA-Covered, Judge Says

Bank of America Corp.'s investment management unit won a court order clarifying that an incentive compensation program benefiting its financial advisers isn’t subject to the vesting rules of the Employee Retirement Income Security Act.

The Merrill Lynch program requires financial advisers to contribute a portion of their commissions and allows those amounts to be forfeited if they voluntarily depart the company under certain circumstances within eight years. Plaintiff Kelly Milligan says this “cancellation rule,” which caused him to lose out on more than $500,000, violates an ERISA rule governing how quickly an employee’s deferred compensation must vest.

Judge Kenneth D. ...