When using market swap rates to calibrate a discount curve, it seems that the PV of a 1Y swap depends on the zero curve at points beyond the 1Y mark.
For example, a USD 1Y swap with trade date today (Wed 16th March 2016) and a spot lag of 2 days will have an effective date of Fri 18th March 2016, and the floating leg accrual periods (after adjusting using modified following convention) are
Period Start Date End Date --------------------------------- 1 18-Mar-2016 20-Jun-2016 2 20-Jun-2016 19-Sep-2016 3 19-Sep-2016 19-Dec-2016 4 19-Dec-2016 20-Mar-2017
The final payment clearly depends on today's LIBOR curve for 20th March 2017, which is more than one year after today (in fact it is 1.011 years in ACT/365 day count).
It seems odd to me that the PV of a 1Y swap would depend on points on the zero curve beyond the one year mark, but that seems to be the case if you correctly compute the start and end dates.
Is it the case? If not, how do institutions normally deal with this?