Handling annual 401(k) compliance testing is a complex task for recordkeepers and third-party administrators (TPAs) due to the intricate IRS and DOL rules, the need for accurate data processing, and the challenge of using outdated manual data sharing methods. The complexity is exacerbated by plans with complex designs and the necessity of accessing up-to-date employee data. Traditional file-based data sharing methods, such as SFTP, are prone to errors and delays, leading to inaccurate compliance test results and potential penalties. To address these challenges, recordkeepers and TPAs are increasingly adopting API-based payroll integrations, which allow for seamless and secure data exchange, reduce administrative workload, and improve the sponsor experience. These integrations, particularly the 360° type, enable real-time data synchronization, automatic updates for deferrals, and efficient year-to-date data collection for audits, ensuring the accuracy and timeliness of data crucial for compliance testing. By utilizing tools like Finch's Unified Employment API, recordkeepers and TPAs can simplify compliance testing processes, scale integrations across multiple payroll systems, and maintain the integrity and efficiency of 401(k) plan management.