All characters that have been inactive since June 22nd, 2014, will have their names changed to placeholders and the names thrown back in the active pool. If you’ve been taking a break and desperately want to make sure that your old character “Boner-Lord” doesn’t lose her name, take heart; the release is happening on June 25th, 2015. Log in once and your name is secure. Otherwise, you just might lose your name.
TERA has a lot of character names already taken, of course, since it’s been running for some time. So the powers that be are going to free up some names that have just been sitting there, unused, for a long enough period of time — i.e., a year.
Source: Official announcement; thanks to Azzura for the tip!