Comment # 11 on bug 1031170 from Bob Goddard

And in case the instructions were not clear enough...

Type in:
ldapmodify -H ldapi:/// -Y EXTERNAL

It will return:
SASL/EXTERNAL authentication started
SASL username: gidNumber=0+uidNumber=0,cn=peercred,cn=external,cn=auth
SASL SSF: 0

Then type in:
dn: cn=module{0},cn=config
changetype: modify
add: olcModuleLoad
olcModuleLoad: ppolicy.so

And <CTRL>-D to end.
Restart slapd, and password policies should then be enabled.

If you look at /etc/openldap/slapd.d/cn=config/cn=module{0}.ldif before and
after, you will see what the required change was needed. Also note that since
CRC's are used, you cannot just manually update that file and expect it to
work.