What exceptions do you allow for compliance training?  For example, if compliance training is due December 31 and employee is retiring January 31, should the soon-to-be retiring employee be required to complete compliance training?

I agree with the others here.  To some extent, it depends on what is being complied with (laws, internal standards, market norms, etc.).  That being said, generally, business processes should not be so strict as to lead toward absurd results.  Sometimes the law is inflexible, and liability is strict.  But where your process can offer the flexibility, a "memo" documenting the exception should be created, signed, and retained.

Exceptions to compliance training may be allowed in certain circumstances, such as when an employee has completed equivalent training, is exempted from required training, or is off work for an extended period of time.

These exceptions need to be thoroughly and accurately documented for future audits.

Compliance training is crucial for informing employees about an organisation’s policies and adherence to laws, and it is often mandatory to protect the organisation and its employees.

I would build on Michelle's comment a bit and say that you have to weigh the risk of not completing it against the social risk that will come with escalation. In my past experience, usually a late training meant a follow-up email or series of emails, and if that's your standard practice, it makes a lot of sense to continue to do that. If they fail to complete the training, you can show you made continued attempts to get 100% completion but had an extenuating circumstance in this case. 

However, if your approach is more assertive...if for example you have an in-person touchpoint with the person and they say they aren't going to do it, what are the consequences? Are you going to try to drive the behavior through a written or verbal warning, and are you willing to accept the fallout that will inevitably come when the person tells his/her peers that "they tried to write me up on my way out?" On the other hand, now that you've escalated it, if you don't follow through, you risk sending the message that you aren't really serious about completion. Neither outcome is good for you, so weigh that risk against the risk of not completing. 

If one is going to create exceptions, ensure they are well communicated, and the system allows to "track" these. Otherwise the data is always skewed, and reports need to be manually created to account for these (agreed) exceptions. 

It really depends on the type of training and the impact of not completing it. Is there a risk of the exception impacting a regulatory audit or some other legal requirement? Does the training provide the company some protections should the exempted employee be injured or some other incident occur? 

These are obviously not the most fun things to think about, but are important to consider as part of a broader discussion about exemptions.