I would argue that graded vesting is better than cliff vesting. Every company I've ever worked for has had cliff vesting after 5 years of employment, so if you leave before then you don't get any company match at all. I'd much prefer graded vesting where at least you're vesting in a piece of the match each year (even though it will take you 6 to get to 100%).
Actually, the longest cliff vesting period NOW is 3 years. It used to be 5 years (prior to 1/1/2007).
See
http://www.dol.gov/ebsa/faqs/faq_compliance_pension.html
They are kind of odd in how they define a year too -- any calendar year in which you work more than 1000 hours. So someone could be a bit screwed if they came in during the third quarter of the year, as their timeframe wouldn't start until the first of the calendar year following when they actually started. I'm getting the benefit here though, as I started in May (meaning that I get a full year of credit for 7 months of working).
I'm not sure if I could leave in year "6" after working for 1000 hours and still have 100% or if I'd have to be there through the end of the calendar year...
I don't think you're reading the plan's requirements correctly. There are multiple purposes for which the year of service terminology is used and you need to make sure you are attributing the year of service for vesting purposes correctly. The year of service concept is used for eligibility as well.
With respect to VESTING, hours of service can be calculated based on actual hours worked, an equivalency method or by an elapsed time method. You should confirm which of these methods your employer uses. Assuming it's the actual hours worked method, then in 2014 you would need to work 1,000 hours (including time before you were eligible for or participating in the plan). Then again in 2015, 2016, 2017, 2018 and 2019. In 2019, you could work 1,000 hours and then leave the company and be fully vested. Also, there are certain situations in which the company must fully vest regardless of how many years of vesting service you had (for example, plan termination).
If you want your eyes to glaze over, go here:
http://www.irs.gov/pub/irs-pdf/p6389.pdfFor the FIRST YEAR ONLY, you have to work 1,000 hours during your first vesting computation period (a year) which begins on your date of hire. So, that third quarter person would have 365 days to get 1,000 hours of service FOR VESTING PURPOSES and for the first year. Then, in subsequent plan years (which aren't necessarily calendar years), the plan year would be used for determining whether a person satisfied the 1,000 hours of service requirement. In other words, it shifts after the initial year (third quarter year 1 to third quarter year 2) to the plan year (if it's a calendar year plan year it would be 1/1 to 12/31 for each subsequent vesting year).
See here:
http://erisadiagnostics.com/wp-content/uploads/servicecrediting.pdf