By default rules for group memberships are taken from config file /etc/security/group.conf.

This module's usefulness relies on the file-systems accessible to the user. The point being that once granted the membership of a group, the user may attempt to create a setgid binary with a restricted group ownership. Later, when the user is not given membership to this group, they can recover group membership with the precompiled binary. The reason that the file-systems that the user has access to are so significant, is the fact that when a system is mounted nosuid the user is unable to create or execute such a binary file. For this module to provide any level of security, all file-systems that the user has write access to should be mounted nosuid.

The pam_group module functions in parallel with the /etc/group file. If the user is granted any groups based on the behavior of this module, they are granted in addition to those entries /etc/group (or equivalent).