Compliance testing is a set of annual checks that retirement plans like 401ks must go through to make sure they’re fair for everyone—not just benefiting highly paid employees or business owners. These tests compare how much different groups of employees are contributing to the plan and whether the plan follows IRS rules. If a plan fails a test, the employer might need to make adjustments, like refunding some contributions or making extra payments to lower-paid workers. The goal is to make sure the plan treats all employees fairly and remains in good standing with the IRS.