Lifetime income disclosures - timing headaches

[AlbanyConsultant]

Maybe I'm just realizing this later than everyone else, but since the rates are changing monthly, are we in for a bunch of timing headaches?  Specifically...

1. My efficient assistant prepared the report and statements in April... and I'm just now getting to reviewing them.  It used to not be a big deal because no numbers changed.  But now I have to re-run the lifetime income disclosures because the interest rates aren't the same now as they were three months ago (or they might be, maybe... better not take the chance!).

2. Let's say I actually did send the statements with disclosures back in April.  Plan sponsors being plan sponsors, the package sat on their desk until I reminded them that they actually need to open it and do something, so they don't hand the statements and disclosures out until July.  Are the disclosures that we prepared back in April no good?  Would the participants ever know or care?

3. The interest rates update near the end of the month (according to the updates I get from my recordkeeping software provider).  Does that mean I'm on hold with sending out reports near the end of the month so I don't accidentally force a client to hand out a disclosure notice that is 'behind' by the time they hand it out?

These sound ridiculous... but that doesn't mean they're not how the rule was written.  Of course, then there's "written" vs. "interpreted"... anyway, am I working myself up over nothing?  Thanks.

[Bri]

So the plan sponsor is late to distribute their otherwise-timely-prepared Q1 statements?  It's the end date for the statement which determines which day's 10 year CMT rate to use.  (A March 31 quarterly statement would use the rate from the first business day of March.  The June 30 statements have now long since had the June rate to use, although waiting for a software vendor to incorporate that could certainly be an issue.  I found the rate online by Friday, June 3, though.)

I'm inferring from your post that the sponsor just never sent out the March 31 statements with the disclosure based on the March rate.  For the June statement you'll need the June rate but that's already available to work into your disclosure.  But we're talking about the usual 45 day deadline for statements in this case, right?  Perhaps re-do the disclosure to be part of the June statement (if you only need to do one batch a year with LII) and separately worry about the failure to distribute March statements (with or without LII).  At least that way you know your LII disclosure was done and distributed properly, even if the regular March statement wasn't distributed.  That kind of thing.

[AlbanyConsultant]

Oh - I wasn't clear.  I'm talking about for a pooled plan where they are being distributed annually.  And, yes, I know there's a whole debate as to when the first ones need to be given out.  This is a theoretical discussion here, so I'm not looking at that.  Let's pretend this is next year, and we're not having any "within a year" issues.

[ESOPMomma]

@AlbanyConsultant - I think you may be working yourself up a bit.  To mirror what @Bri stated, the rate you use on the LID/LII is tied to the month-end, quarter-end or year-end for which you are preparing the statement.  Since my plans are primarily ESOP and only provide an annual statement, right now I am preparing lots of December 31, 2021 statements.  But even though it is now July 2022, I am still using the December 2021 interest rates for the LID because that is their plan's year end and that is the period end date for the statements.  Based on what you are describing, that would be a total nightmare!  So whether you don't get around to reviewing things right away or they sit on a client's desk longer than they should, it shouldn't cause you to have to re-run anything if you used the appropriate rate for the period end date you are reporting on the statement.

[AlbanyConsultant]

That's what I was thinking, but I just got inside my own head, I guess. Thanks!