diff --git a/REFERENCE.md b/REFERENCE.md
index f4e078778b..a0e6a924df 100644
--- a/REFERENCE.md
+++ b/REFERENCE.md
@@ -4429,6 +4429,8 @@ Data type: `Optional[Optional[Postgresql::Pg_password_encryption]]`
 
 Set type for password hash
 
+Default value comes from `postgresql::params::password_encryption` and changes based on the `postgresql::globals::version`.
+
 ##### `salt`
 
 Data type: `Optional[Optional[Variant[String[1], Integer]]]`
diff --git a/lib/puppet/functions/postgresql/postgresql_password.rb b/lib/puppet/functions/postgresql/postgresql_password.rb
index 68be8b7374..ef899254da 100644
--- a/lib/puppet/functions/postgresql/postgresql_password.rb
+++ b/lib/puppet/functions/postgresql/postgresql_password.rb
@@ -13,6 +13,8 @@
   #   If the Postgresql-Passwordhash should be of Datatype Sensitive[String]
   # @param hash
   #   Set type for password hash
+  #
+  #   Default value comes from `postgresql::params::password_encryption` and changes based on the `postgresql::globals::version`.
   # @param salt
   #   Use a specific salt value for scram-sha-256, default is username
   #
@@ -27,7 +29,8 @@
     return_type 'Variant[String, Sensitive[String]]'
   end
 
-  def default_impl(username, password, sensitive = false, hash = 'md5', salt = nil)
+  def default_impl(username, password, sensitive = false, hash = nil, salt = nil)
+    hash = call_function(:'postgresql::default', 'password_encryption') if hash.nil?
     password = password.unwrap if password.respond_to?(:unwrap)
     if password.is_a?(String) && password.match?(%r{^(md5[0-9a-f]{32}$|SCRAM-SHA-256\$)})
       return Puppet::Pops::Types::PSensitiveType::Sensitive.new(password) if sensitive
diff --git a/spec/functions/postgresql_password_spec.rb b/spec/functions/postgresql_password_spec.rb
index 0cd765d6b8..1c75c9b6f8 100644
--- a/spec/functions/postgresql_password_spec.rb
+++ b/spec/functions/postgresql_password_spec.rb
@@ -3,5 +3,7 @@
 require 'spec_helper'
 
 describe 'postgresql_password' do
+  include_examples 'Ubuntu 18.04'
+
   it_behaves_like 'postgresql_password function'
 end
diff --git a/spec/functions/postgresql_postgresql_password_spec.rb b/spec/functions/postgresql_postgresql_password_spec.rb
index d70feaf15b..d66e5afea9 100644
--- a/spec/functions/postgresql_postgresql_password_spec.rb
+++ b/spec/functions/postgresql_postgresql_password_spec.rb
@@ -3,5 +3,7 @@
 require 'spec_helper'
 
 describe 'postgresql::postgresql_password' do
+  include_examples 'Ubuntu 18.04'
+
   it_behaves_like 'postgresql_password function'
 end