It's important to know your team and what makes each of them feel appreciated. Also, a great celebration should reflect the length of service. Keep the event easy and informal for lower years; build in significance as a career grows.
Set a date as close to the actual anniversary as possible and invite team members and other work associates, leaders, business partners, and others to attend. Ask 2 to 3 people who know the person well to say a few words of appreciation at the event.