Merrill Lynch Advisers’ Deferred Pay Rule Appeal Looks Shaky

Merrill Lynch appears poised to beat an appeal by financial advisers challenging their deferred incentive compensation program’s forfeiture rules, after a panel of Fourth Circuit judges appeared unsympathetic to the advisers’ position.

Judge J. Harvie Wilkinson III seemed unwilling during Thursday arguments to characterize the program offered by the Bank of America Corp. investment management unit as a pension plan governed by the Employee Retirement Income Security Act. Pension plans are “something you look forward to in your retirement years,” and most of the money paid out under the Merrill Lynch program occurs pre-retirement, he said.

Deferred incentive compensation programs ...