We create the smtpauth.mer file with the same pairs as local mailbox name (= username) and the pop3 password. If your local mailboxes follow the username@domain syntax you should be able to have that combination within smtpauth.mer.
However, we've found it to be limiting, narrowminded and confusing for the users to have local mailboxes equal the mail-address. It gets very hard to explain that a mailbox has mail addresses attached to it, and that you can have as many as you like connected with a mailbox. Also for our users when using the webmail interface our users can log in using either their email address or their mailbox name, and a conversion is made if needed into the pair of mailbox/password for proper pop and imap fetch.