Password authentication with Pgpool

I'm trying to figure out if I'm misunderstanding Pgpool or configuring it incorrectly. I have a database that various users connect to. I want to set up Pgpool to act as a load balancer, and perhaps also to perform failover. I want the database to handle authentication, but logins need to be encrypted running over the network. I've tried various configurations and I can get authentication to work by setting the password in the pool_passwd file, but if I then log into the database and change my password, even if I connect via Pgpool, the pool_passwd file does not update. Can Pgpool not be set up to encrypt data, but act as a passthrough to the DB for authentication?